The Securities and Exchange Commission (SEC) has charged BF Borgers, the independent accounting firm of Trump Media & Technology Group, with widespread fraud and operating a “sham audit mill.” The SEC accused BF Borgers of fabricating audit documentation and falsely representing that their work complied with accounting standards. This fraud was described as massive and impacted over 1,500 SEC filings and more than 500 public companies. As a result, the SEC has permanently suspended BF Borgers from practicing as accountants before the agency and imposed fines totaling $14 million on the firm and its owner, Benjamin Borgers.
The SEC made no allegations of wrongdoing against Trump Media, the owner of Truth Social, in the charges against BF Borgers. Trump Media has announced plans to work with new auditing partners in compliance with the SEC order. BF Borgers had 350 clients subject to SEC rules during the time of the fraud, with Trump Media being one of the highest profile clients. However, the SEC’s review focused only on public companies, excluding Trump Media’s private work with BF Borgers. Despite this, Trump Media’s valuation has exceeded $9 billion on Wall Street, though the company generates little revenue and Truth Social remains a small player in the social media landscape compared to other platforms.
The SEC found that a significant portion of BF Borgers’ clients, including at least 75% of the public filings reviewed by the agency, did not comply with accounting standards. This is not the first time BF Borgers has faced disciplinary action, as regulators in Colorado have taken actions against the firm dating back to 2019. Additionally, the Association of International Certified Professional Accountants terminated BF Borgers from its peer review program due to serious deficiencies in performance. Trump Media had announced BF Borgers as its public accountant in late March, prior to the SEC’s charges against the firm.
In response to the SEC’s actions, BF Borgers has been permanently shut down by the agency, and the firm’s owner, Benjamin Borgers, has agreed to pay fines along with the company. Trump Media will need to seek new accounting firms following the suspension of BF Borgers. Truth Social, the social media platform owned by Trump Media, has seen a decline in average daily active users in April, with the app still being a smaller player compared to others like X (formerly known as Twitter). Despite Trump Media’s success in terms of valuation, the company faces challenges in generating revenue and expanding the user base of Truth Social.
Overall, the SEC’s charges against BF Borgers highlight the importance of accountability and compliance in the accounting industry. The firm’s fraudulent activities and failure to adhere to accounting standards have had far-reaching consequences for numerous public companies. Trump Media, as a client of BF Borgers, must now navigate the aftermath of the firm’s suspension and find new accounting partners to ensure financial transparency and compliance moving forward.
