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Trump Media & Technology Group’s Audit Firm Banned for Fraud
The Securities and Exchange Commission (SEC) permanently barred the audit firm BF Borgers from serving as accountants due to allegations of “massive fraud.” The SEC charged the firm with failing to comply with Public Company Accounting Oversight Board (PCAOB) standards during audits and reviews of over 1,500 SEC filings between January 2021 and June 2023.
Gurbir Grewal, Director of the SEC’s Division of Enforcement, condemned BF Borgers as a “sham audit mill.” In response to the charges, BF Borgers agreed to a $12 million civil penalty, while managing partner Benjamin Borgers agreed to a $2 million civil penalty. Both individuals accepted permanent suspensions from serving as accountants before the SEC.
Grewal characterized Ben Borgers and BF Borgers as responsible for a substantial failure amongst gatekeepers in financial markets. The fraudulent conduct of the firm was deemed to have exposed investors and markets to risk and eroded trust in U.S. markets.
Allegations Against BF Borgers
- Borgers and his firm falsely claimed their work was compliant with PCAOB standards
- They fabricated audit documentation to appear PCAOB compliant
- Falsely stated in audit reports, included in over 500 public company SEC filings, that their audits met the required standards
Despite these charges, BF Borgers remained Trump Media’s independent registered public accounting firm as of April 1. A filing with the Securities and Exchange Commission indicated that Borgers was initially hired on January 22, 2022, during Trump Media’s time as a privately held company.
On March 29, Trump Media’s audit committee approved Borgers to continue as the company’s independent registered public accounting firm for the 2024 fiscal year. This decision was documented in SEC filings.
Prior Scrutiny of BF Borgers
Borgers, based in Lakewood, Colorado, had previously come under investigation for its business practices. The Canadian Public Accountability Board (CPAB) had prohibited Borgers from taking on new audit clients in Canada, as outlined in an enforcement action from December. Despite this action, Borgers, with minimal activity in Canada, audited under 50 Canadian reporting issuers.
Additionally, the American Institute of Certified Public Accountants’ (AICPA) peer review program terminated Borgers’ enrollment due to a perceived failure to cooperate. The firm was found to be severely deficient in its performance, leading to the termination of their participation in the program.
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