Following the Securities and Exchange Commission charging auditing firm BF Borgers and its owner, Benjamin F. Borgers, with “massive fraud,” Trump Media and Technology Group released a statement indicating they look forward to working with new auditing partners in response to the SEC order. The charges against BF Borgers include deliberate and systematic failures in more than 1,500 audits, such as not following accounting rules, falsifying documentation, and inaccurately stating that their work met audit standards. In settling the charges, BF Borgers agreed to pay a $12 million fine, while Benjamin Borgers agreed to a $2 million fine and both were permanently suspended from handling SEC-related matters as accountants.
Trump Media had hired BF Borgers as its auditor on March 28, with the company’s most recent annual report filing disclosing that the auditing firm had handled audits prior to the company going public by merging with Digital World Acquisition Corp. Before hiring BF Borgers, the company had gone through at least two other auditors, one of which resigned in July 2023 and another that was terminated by the board in March, coinciding with the re-hiring of BF Borgers. The SEC found that BF Borgers had taken shortcuts in their audits, including copying documentation from a previous year, changing dates, and passing it off as current, along with falsely documenting work that was never completed.
The investigation by the SEC revealed that BF Borgers had fabricated documentation and falsely represented that work had been approved by Benjamin Borgers and another reviewer. Gurbir Grewal, director of the SEC’s enforcement division, described the situation as one of the largest failures by gatekeepers in financial markets and commended the SEC staff for their efforts in shutting down Borgers and his “sham audit mill.” In response to the charges, BF Borgers agreed to pay a hefty fine to settle the case, with Benjamin Borgers also agreeing to a fine and both being permanently suspended from handling SEC-related matters as accountants.
The charges against BF Borgers and Benjamin Borgers did not directly involve their work for Trump Media, as the fraud related to other audits conducted by the firm. Trump Media stated that they are looking forward to collaborating with new auditing partners following the SEC order. The company had previously cycled through auditors before settling on BF Borgers, with one resigning in July 2023 and another being terminated by the board in March. Trump Media’s engagement with BF Borgers ended abruptly due to the fraud charges, and they now focus on finding new auditing partners to ensure compliance with regulations moving forward.
The charges brought against BF Borgers and its owner signal a significant case of fraud within the auditing industry, with the SEC’s enforcement division emphasizing the severity of the violations. The fines imposed on BF Borgers and Benjamin Borgers, along with their permanent suspensions from handling SEC-related matters, serve as a stern warning to other auditing firms. The case highlights the importance of maintaining ethical standards in the auditing profession and the potential consequences of failing to meet regulatory requirements. Trump Media’s swift action in response to the charges reflects a commitment to upholding integrity and accountability in their financial reporting processes by seeking new auditing partners to ensure compliance with industry standards.
