The Trump Media and Technology Group, which owns the social networking site Truth Social, recently fired its auditor, BF Borgers, after federal regulators charged the firm with “massive fraud.” The Securities and Exchange Commission accused BF Borgers and its owner Benjamin F. Borgers of multiple audit failures, including not complying with accounting rules and creating false documentation to hide their mistakes. To settle the charges, BF Borgers agreed to pay $14 million in civil penalties and both the firm and its owner are permanently suspended from handling SEC-related matters as accountants. Despite the charges, BF Borgers’ work for Trump Media was not involved in the fraudulent activities.
BF Borgers was appointed as Trump Media’s auditor on March 28, as disclosed in a recent annual report filing. Prior to this, the Colorado firm had also conducted audits for Trump Media before it went public through a merger with Digital World Acquisition Corp. Trump Media had previously worked with two other auditors, with one resigning in July 2023 and the other being terminated by the board in March, right before re-hiring BF Borgers. This turnover in auditors raises questions about the company’s financial oversight practices.
In response to the auditor change, Trump Media stated that the decision was made with the recommendation and approval of the Audit Committee of the company. The immediate replacement for BF Borgers is Arizona-based accountant Semple, Marchal & Cooper, who were engaged by Trump Media over the weekend. It is unclear whether Semple, Marchal & Cooper will review the previous work done by BF Borgers for Trump Media. Both BF Borgers and Semple, Marchal & Cooper have not yet provided statements regarding the auditor switch or the charges against BF Borgers and its owner.
The decision to fire BF Borgers and engage a new accounting firm comes at a critical time for Trump Media as it continues to develop and expand Truth Social, its social networking platform. The company, founded by former President Donald Trump, is seeking to establish itself as a major player in the tech and media industry. The fallout from the fraud charges against BF Borgers adds a layer of uncertainty to Trump Media’s operations and financial reporting processes. Investors and stakeholders will be closely monitoring the situation to ensure transparency and accountability within the company.
Moving forward, Trump Media will need to ensure that its financial reporting practices are in compliance with regulatory standards and that it maintains a strong system of internal controls. The company’s reputation and credibility are on the line, especially as it seeks to attract users and advertisers to Truth Social. The dismissal of BF Borgers and the appointment of Semple, Marchal & Cooper signal a commitment to addressing any issues related to financial oversight and accountability within Trump Media. As the company navigates these challenges, it will be essential for it to rebuild trust and confidence among investors and stakeholders.
