The Securities and Exchange Commission (SEC) made a significant move on Friday, leveling charges of “massive fraud” against an auditing firm recently hired by Trump Media and Technology Group, despite its brief tenure of just 37 days. However, the charges are not related to any work conducted for former President Donald Trump’s media company.
The firm under scrutiny, BF Borgers, and its owner, Benjamin F. Borgers, face allegations of “deliberate and systematic failures” in over 1,500 audits. These accusations include breaches of accounting regulations, the creation of falsified documents to conceal inadequacies, and the issuance of misleading audit reports falsely asserting compliance with audit standards.
To resolve the SEC’s charges, BF Borgers agreed to a fine of $12 million, while Benjamin Borgers consented to pay a fine of $2 million. Attempts to reach Benjamin Borgers for comment were unsuccessful. Additionally, both BF Borgers and Benjamin Borgers agreed to immediate, permanent suspensions, barring them from handling SEC-related matters as accountants.
Despite Trump Media’s recent engagement of BF Borgers as its auditor on March 28, as disclosed in its latest annual report filing, the SEC’s actions shed light on the firm’s troubled history. Before Trump Media, BF Borgers had conducted audits for the company during its transition to becoming publicly traded through a merger with Digital World Acquisition Corp.
The company had faced turnover in auditors previously, with one resigning in July 2023 and another being terminated by the board in March, coinciding with BF Borgers’ re-hiring.
In response to the SEC’s findings, Trump Media expressed its readiness to collaborate with new auditing partners in compliance with the SEC’s directives.
The SEC’s investigation revealed BF Borgers’ shortcuts, such as recycling audit documentation from previous years, altering dates, and passing it off as current. Moreover, the firm falsified documentation of non-existent planning meetings with clients and misrepresented approval from Benjamin Borgers and another reviewer.
Gurbir Grewal, director of the SEC’s enforcement division, condemned the actions of Benjamin Borgers and BF Borgers, labeling it as “one of the largest wholesale failures by gatekeepers in our financial markets.” He credited the SEC staff for their meticulous work, resulting in the permanent closure of Borgers’ “sham audit mill.”
