An accounting firm that previously worked with former President Donald Trump’s social media company, Trump Media, has been accused of “massive fraud” by the Securities and Exchange Commission (SEC) and has been shut down. BF Borgers, the firm in question, was described by the SEC’s enforcement division director as a “sham audit mill” due to alleged failures in independent audits and reviews that were included in over 1,500 SEC filings from January 2021 to June 2023. While Trump Media used BF Borgers as its accounting firm before going public in March, the firm is not accused of committing fraud in its work with the company, as it falls outside of the SEC’s investigation scope.
BF Borgers and its owner, Benjamin Borgers, have been ordered by the SEC to immediately cease practicing as accountants before the commission and to pay a combined civil fine of $14 million. Companies that utilized BF Borgers for SEC purposes have been instructed to find a different qualified accountant. Trump Media, the company that owns Truth Social, Trump’s social media platform, has stated that they look forward to working with new auditing partners in compliance with the SEC’s order. The SEC’s investigation found that at least 75 percent of filings involving BF Borgers did not meet federal standards, with the firm accused of fabricating audit documentation and lying to clients.
Former President Trump’s involvement with Truth Social has garnered attention, with his ownership of approximately 60 percent of Trump Media stock shares. The stock saw a significant increase in value after the company went public, followed by a sharp decline. While the stock price has stabilized somewhat, its high valuation has puzzled experts. Some have compared Trump Media stock to “meme stocks” that have seen artificial spikes in value due to online activity. The company’s April SEC filing revealed a revenue of just over $4.1 million and a loss of nearly $58.2 million in its last operating year. Despite this, the company is valued at over $6 billion on the stock market.
The popularity of Truth Social, despite Trump being a prominent user, has been called into question. The platform had around 113,000 active daily users as of April, representing a decrease of nearly 20 percent from the previous year. The unexpected high valuation of Trump Media stock has led some to speculate that enthusiastic Trump supporters may have influenced the price. The SEC’s actions against BF Borgers and the company’s subsequent shutdown have been praised by Gurbir Grewal, who highlighted the importance of maintaining trust and confidence in financial markets. Despite the challenges faced by Trump Media, the company has expressed optimism about collaborating with new auditing partners moving forward.
