The accounting firm BF Borgers, which served as the independent accounting firm for Trump Media & Technology Group, was charged by the Securities and Exchange Commission (SEC) with widespread fraud and operating a “sham audit mill.” The SEC accused the firm of fabricating audit documentation and falsely representing compliance with accounting standards, leading to a massive fraud impacting over 1,500 SEC filings and more than 500 public companies. The SEC imposed severe penalties on BF Borgers, permanently suspending the firm and its owner from practicing as accountants and imposing a collective fine of $14 million.
While the SEC charges focused on BF Borgers, Trump Media (DJT) was not implicated in any wrongdoing by the regulator. Following the charges, Trump Media announced plans to work with new auditing partners in compliance with the SEC order. Although BF Borgers served as Trump Media’s independent registered accounting firm before its public listing, the SEC review specifically focused on public companies and did not include the firm’s work for Trump Media when it was private.
Despite achieving a valuation of over $9 billion on Wall Street, Trump Media generates little revenue and its social media platform, Truth Social, remains a relatively small player in the industry with a decline in average daily active users. The SEC found that a significant number of BF Borgers’ clients did not comply with accounting standards, including many of the public companies audited by the firm. This is not the first time BF Borgers and its founder have faced disciplinary action, with previous regulatory issues dating back to 2019.
In response to the SEC charges, Trump Media stated its intention to work with new auditing partners moving forward. The SEC’s penalties against BF Borgers permanently shut down the firm, highlighting the severity of the fraud allegations. Public companies that had hired BF Borgers were advised by the SEC to find new accounting firms, and Trump Media expressed its commitment to cooperating with the regulator’s order.
Despite the challenges faced by BF Borgers and the regulatory scrutiny on Trump Media’s former accounting firm, the social media company’s operations continue under the leadership of former President Donald Trump. While Truth Social remains a smaller player in the social media landscape compared to larger competitors, the company’s valuation on Wall Street reflects investors’ interest in its potential growth. Moving forward, Trump Media will need to navigate the fallout from the SEC charges and establish new partnerships with reputable accounting firms to ensure compliance and financial transparency in its operations.
