SEC Charges Trump Media’s Accounting Firm with “Massive Fraud”
The Securities and Exchange Commission (SEC) levied charges against BF Borgers, the independent accounting firm for Trump Media & Technology Group, accusing it of extensive fraud and operating what it described as a “sham audit mill.”
The SEC’s allegations made public, did not implicate Truth Social owner Trump Media (DJT) in any wrongdoing, as the charges solely targeted BF Borgers.
The SEC accused BF Borgers of deliberate and systemic failures, including the fabrication of audit documentation and false representations regarding compliance with accounting standards, constituting what the agency termed as “massive” fraud spanning from January 2021 to June 2023, impacting over 1,500 SEC filings and more than 500 public companies.
In response, the SEC imposed severe penalties, permanently suspending BF Borgers from practising as accountants before the agency with immediate effect. Additionally, the firm and its owner, Benjamin Borgers, agreed to collectively pay $14 million in fines.
Gurbir Grewal, director of the SEC’s enforcement division, emphasized the closure of Borgers and its “sham audit mill” in a press release, noting the agency’s commitment to addressing financial malpractice.
Trump Media, while not directly implicated in the charges, announced plans to seek new auditing partners in compliance with the SEC’s order, according to spokesperson Shannon Devine.
BF Borgers, which served as Trump Media’s independent registered accounting firm before its public listing in March, had its appointment approved by the audit committee of Trump Media. However, the SEC’s review focused solely on public companies, excluding Trump Media’s private operations.
This development adds to BF Borgers’ history of regulatory scrutiny, with past disciplinary actions dating back to 2019 in Colorado, where the firm faced repeated regulatory actions. Last year, it was terminated from the Association of International Certified Professional Accountants’ peer review program due to significant deficiencies in performance.
Despite the valuation of Trump Media exceeding $9 billion, Truth Social, its flagship platform, lags behind major competitors in terms of user engagement, with a reported 19% year-over-year decline in average daily active US users in April.
The SEC’s findings underscore the challenges facing Trump Media amid its efforts to establish itself in the competitive social media landscape and its ongoing search for new accounting partners following the suspension of BF Borgers.