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The auditing firm for Trump media and the auditor’s owner were charged Friday by the Securities and Exchange Commission with “massive fraud” over accounting work involving more than 1,500 SEC filings, the federal regulator announced.
The auditor, BF Borgers CPA, and its owner, Benjamin Borgers, have agreed to be permanently suspended from practicing accounting before the SEC and have also agreed to pay a total of $14 million in civil penalties, without admit or deny the allegations, the SEC said.
The agency called BF Borgers a “sham audit factory” and said the company and its owner “deliberately systematically omitted to conduct audits and quarterly reviews” disclosed in more than 1,500 SEC filings from January 2021 to June 2023, according to Public Company Accounting Overview included plank Standards.
The SEC said the Lakewood, Colo.-based auditor lied to clients by claiming his work met PCAOB standards, falsified audit documents to make it appear the work met those standards, and made false statements stated in audit reports contained in more than 500 of the company’s public SEC filings that the company’s audits met these standards.
BF Borgers served as auditor for Trump Media, which was then privately held and was undergoing a proposed merger with publicly traded shell company Digital World Acquisition Corp., during the period covered by the SEC complaint. aimed for.
Trump Media and DWAC completed this merger in late March 2024, resulting in Trump Media publicly trading under the DJT ticker.
Three days after the company’s IPO, Trump Media’s board approved retaining BF Borgers as the company’s auditor for 2024.
BF Borgers offices in Lakewood, Colorado.
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“Ben Borgers and his accounting firm BF Borgers were responsible for one of the greatest gatekeeper failures in our financial markets,” SEC Enforcement Division Director Gurbir Grewal said in a statement.
“Through their fraudulent conduct, they not only endanger investors and markets by causing public companies to include non-compliant audits and reviews in more than 1,500 filings with the Commission, but also undermine confidence in our markets,” Grewal said.
BF Borgers did not immediately respond to CNBC’s requests for comment.
The SEC’s bombshell investigation raised questions about the accuracy of financial information in thousands of reports issued by the companies Borgers audited, including Trump Media, of which former President Donald Trump is the majority shareholder.
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These periodic reports, filed with the SEC, provide important information that investors and analysts use to evaluate companies whose stocks trade on public markets.
The SEC said reports filed by companies that had appointed BF Borgers as an auditor “do not necessarily need to be amended solely as a result of the Commission’s entry of the regulation.”
“Issuers should, however, consider whether their filings may need to be amended to address any reporting deficiencies resulting from the engagement of BF Borgers,” the SEC said, while noting that companies that had used Borgers now have one need to find a new qualified auditor.
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As of Friday morning, the investor relations page of Trump Media’s website still listed BF Borgers as the company’s independent auditor.
But Trump Media spokeswoman Shannon Devine told CNBC: “Trump Media looks forward to working with new audit partners pursuant to today’s SEC order.”
The stock price of Trump Media, which owns the app Truth Social, fell as much as 9% on Friday before paring that loss to a 1.7% decline.
—Additional reporting by CNBC’s Brian Schwartz.
Correction: The auditor, BF Borgers CPA, and its owner, Benjamin Borgers, agreed to pay civil penalties totaling $14 million without admitting or denying the allegations, the SEC said. An earlier version stated the terms incorrectly.
This is breaking news. Please check back for updates.
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2024-05-03 18:54:11
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