Post-Scandal, Trump Media’s Auditing Firm Charged with “Massive Fraud” by SEC
BF Borgers, Trump Media’s recently appointed auditing firm, faces serious charges by the SEC
SAN FRANCISCO (AP) — In a shocking turn of events, accounting firm BF Borgers and its owner, Benjamin F. Borgers, have been accused of “massive fraud” by the Securities and Exchange Commission (SEC). Despite the connection with Trump Media and Technology Group, the charges stem from more extensive auditing failures. The SEC has alleged deliberate and systematic violations committed by the firm in over 1,500 audits. These violations include a disregard for accounting rules, creation of fake documentation to cover up their failures, and falsely declaring in audit reports that their work had met required standards.
As part of reaching a settlement, BF Borgers has agreed to pay a significant fine of $12 million, while owner Benjamin Borgers has agreed to pay $2 million. However, Benjamin Borgers is yet to comment on the matter.
The SEC’s suspension order will also be implemented with immediate effect. BF Borgers and Benjamin Borgers are prohibited from engaging in any SEC-related accounting work.
BF Borgers previously served as Trump Media’s auditor and handled audits for their merger
Trump Media had appointed BF Borgers as its auditor on March 28, as confirmed by the company’s recent annual report filing[^1^]. The report also revealed that BF Borgers had previously conducted audits during the company’s transition to becoming public by merging with Digital World Acquisition Corp, a cash-rich shell company[^2^]. Prior to BF Borgers, Trump Media had experienced turnover with two other auditors, with one resigning in July 2023 and another being terminated in March, right before BF Borgers was rehired.
In response to the SEC charges, Trump Media stated that they are looking forward to collaborating with new auditing partners as per the SEC’s order[^3^].
SEC findings expose BF Borgers and Benjamin Borgers’ extensive use of shortcuts and forged documentation
According to the SEC, BF Borgers resorted to shortcuts that included the use of previous year’s audit documentation with modified dates, presenting it as current documentation[^4^]. With fabricated work that was never actually executed, this counterfeit documentation showed planned client meetings that never took place and falsely affirmed the approval of audit work by Benjamin Borgers and another reviewer.
Gurbir Grewal, director of the SEC’s enforcement division, termed the failure of Benjamin Borgers and BF Borgers as one of the largest wholesale failures by gatekeepers in the financial markets[^5^]. Grewal applauded the meticulous efforts of the SEC staff which led to the permanent shutdown of Borgers’ fraudulent audit mill.
“Massive Fraud” – Fallout and Future for BF Borgers and Trump Media
The recent SEC charges create a significant uproar in the auditing world, raising concerns about the efficacy of regulatory processes and internal controls. The fallout will entail BF Borgers’ payment of the aforementioned fines, in addition to their permanent disassociation with SEC-related accounting matters. The reputational impact for both the auditing firm and Trump Media cannot be underestimated. It remains to be seen how they will navigate the aftermath and reestablish their credibility in the eyes of both current and potential clients.
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