An auditing firm that counted Trump Media among its clients has been barred from practicing accounting for committing “massive fraud,” the Securities and Exchange Commission said on Friday.
BF Borgers and its owner, Benjamin F. Borgers, were charged with “deliberate and systemic failures” to comply with audit standards in more than 1,500 filings, the SEC said on Friday. The firm also falsely claimed to clients that it was adhering to those standards and falsified documents to make it appear so, according to the agency.
To settle the charges with the SEC, the company has agreed to pay a $12 million civil penalty, and Borgers will personally pay $2 million. Both are also permanently suspended from practicing as accountants. Neither responded to CNBC’s request for comment.
Gurbir S. Grewal, director of the SEC’s Division of Enforcement, slammed Borgers and “his sham audit mill” in a statement.
“Ben Borgers and his audit firm, BF Borgers, were responsible for one of the largest wholesale failures by gatekeepers in our financial markets,” Grewal said. “As a result of their fraudulent conduct, they not only put investors and markets at risk by causing public companies to incorporate noncompliant audits and reviews into more than 1,500 filings with the Commission, but also undermined trust and confidence in our markets.”
BF Borgers' sudden demise "will force hundreds of companies ... to hunt for new auditors, scour old audits for potential problems, and scramble to meet public company regulatory deadlines," Bloomberg reports.
Since 2022, those clients included Trump Media & Technology Group — its largest client, according to Bloomberg. After Trump Media went public in March following a messy merger with Digital World Acquisition Co., its board voted to keep on BF Borgers as its auditors for 2024, CNBC reported. A spokesperson for the company told CNBC, “Trump Media looks forward to working with new auditing partners in accordance with today’s SEC order.”
The former president’s media company is not mentioned in the SEC filing. Trump Media shares did fall about 7% when news of the settlement broke, as The New York Times points out, though the stock price later bounced back somewhat.