Audit Firm Responsible for Trump’s Truth Social Platform Accused of “Massive Fraud”
The auditing company overseeing the parent company of Donald Trump’s Truth Social platform is facing serious allegations of fraud. The Securities and Exchange Commission (SEC) has accused BF Borgers of engaging in “massive fraud,” labeling it a “sham audit mill” that committed “deliberate and systemic failures” in over 1,500 filings between January 2021 and June 2021.
SEC Charges and Settlement
According to CNBC, BF Borgers and its owner, Benjamin Borgers, agreed to settle the SEC’s charges without admitting or denying them. As part of the settlement, they agreed to permanently cease their accounting operations and pay a combined $14 million in civil penalties ($12 million from the firm and $2 million from Benjamin Borgers).
Implications for Trump Media & Technology Group
The Washington Post highlights that the period under investigation predates Trump Media & Technology Group’s public listing, indicating that its filings were not part of the SEC’s review. However, BF Borgers had served as the auditor for Trump Media since 2022. The SEC accused BF Borgers of various offenses, including falsely representing compliance with Public Company Accounting Oversight Board (PCAOB) standards, fabricating audit documentation, and falsely stating compliance with PCAOB standards in audit reports submitted to the SEC.
Errors and Misspellings
Last month, the Financial Times discovered several spelling errors in filings attributed to Benjamin Borgers, including misspelling the name of his own firm. The Times reported 14 variations of the firm’s name, suggesting potential simple spelling mistakes due to being “overworked” or “fat-fingered.”
Impact on Financial Reporting Accuracy
While Trump Media’s records were not part of the review, the SEC’s allegations raise concerns about the accuracy of financial information in reports issued by companies audited by BF Borgers. This includes Trump Media. A representative of Trump Media told CNBC that the company plans to work with new auditing partners following the SEC’s order. Trump Media’s share price experienced a 9% decline following the news.
