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.
Following an investigation, the SEC has raised concerns about Borgers' failure to adhere to Public Company Accounting Oversight Board (PCAOB) standards during its audits. The regulatory agency mandates that public companies' financial statements must meet these standards, but Borgers allegedly assured clients that their work would comply with the requirements, which was not the case.
According to the SEC, approximately 75% of the filings that included Borgers' audits and reviews did not meet PCAOB standards.
Gurbir S. Grewal, the director of the SEC's Division of Enforcement, expressed his disappointment, stating, "Ben Borgers and his audit firm, BF Borgers, were responsible for one of the largest wholesale failures by gatekeepers in our financial markets." He further emphasized that their actions not only endangered investors and markets by causing public companies to incorporate noncompliant audits into over 1,500 filings with the Commission but also eroded trust in the financial markets.
