WASHINGTON DC, USA – The Securities and Exchange Commission, SEC, has levied serious charges against BF Borgers, the independent accounting firm for Trump Media & Technology Group, accused of operating a “sham audit mill” and committing extensive fraud.
The charges, announced on Friday, May 3, 2024, do not implicate Trump Media directly, but the fallout could have significant implications for the company and its financial reporting.
According to the SEC, BF Borgers engaged in “deliberate and systemic failures” from January 2021 through June 2023.
These failures reportedly affected over 1,500 SEC filings and more than 500 public companies.
The firm is accused of fabricating audit documentation and falsely assuring clients that its audits were conducted in accordance with prevailing accounting standards.
Gurbir Grewal, director of the SEC’s enforcement division, stated in a press release, “Borgers and his sham audit mill have been permanently shut down.”
As a result of the charges, BF Borgers and its owner, Benjamin Borgers, have agreed to pay $14 million collectively in fines and are permanently banned from practicing as accountants before the SEC.
The ramifications for public companies that employed BF Borgers are significant. The SEC has advised these companies to seek new accounting services, a directive that also affects Trump Media.
In response, Trump Media has announced its intention to find new auditing partners.
“Trump Media looks forward to working with new auditing partners in accordance with today’s SEC order,” said Shannon Devine, a spokesperson for Trump Media, in a statement to CNN.
While BF Borgers served as the independent registered accounting firm for Trump Media before the company went public, its duties extended to when Trump Media transitioned to public trading.
Despite the broader implications of the SEC’s findings, the review did not extend to BF Borgers’ work with Trump Media during its private phase.
The controversy surrounding BF Borgers casts a shadow over Trump Media, chaired and majority-owned by former President Donald Trump.
Trump Media, which operates the social media platform Truth Social, has been valued at over $9 billion despite generating minimal revenue and remaining a minor entity in the broader social media landscape.
According to Similarweb, Truth Social’s average daily active users in the U.S. on iOS and Android fell by 19% year-over-year in April to 113,000.
In comparison, X, formerly known as Twitter, boasts more than 300 times as many users.
As the SEC continues its crackdown on audit malpractices, the fallout from this case will likely prompt a closer examination of financial oversight and transparency within publicly traded companies.
