BF Borgers, the independent accounting firm for Trump Media & Technology Group, is facing allegations of “massive fraud” from the Securities and Exchange Commission, which on Friday claimed the auditor ran a “sham audit mill” that put investors at risk.
The SEC said Borgers has been shut down, noting that the company agreed to a permanent suspension from appearing and practicing before the agency as accountants. The suspension is effective immediately. Additionally, BF Borgers agreed to pay a $12 million civil penalty, while owner Benjamin Borgers will pay a $2 million civil penalty.
Neither the SEC statement nor its complaint mentioned Trump Media & Technology Group, which did not immediately respond to a request for comment. Borgers also didn’t respond to a request for comment.
The SEC charged Borgers with “deliberate and systemic failures” in complying with accounting standards in 1,500 SEC filings from January 2021 through June 2023, a period during which Borgers had about 350 clients. Trump Media’s March debut as a public company came after that time period, but the social media company said in its 2023 annual report that it had worked with Borgers prior to going public on the Nasdaq stock exchange.
In its report, the company added that an audit committee on March 28 approved Borgers to audit its 2023 and 2022 financial statements.
Among the issues cited by the SEC is that Borgers failed to comply with Public Company Accounting Oversight Board (PCAOB) standards in its audits, even though the regulatory agency requires that public companies’ financial statements meet those standards. Borgers also allegedly falsely told clients that its work would comply with those standards.
The agency claims that at least 75% of the filings that incorporated Borgers’ audits and reviews failed to meet PCAOB standards.
“Ben Borgers and his audit firm, BF Borgers, were responsible for one of the largest wholesale failures by gatekeepers in our financial markets,” Gurbir S. Grewal, director of the SEC’s Division of Enforcement, said in the statement.
He added, “As a result of their fraudulent conduct, they not only put investors and markets at risk by causing public companies to incorporate noncompliant audits and reviews into more than 1,500 filings with the Commission, but also undermined trust and confidence in our markets.”