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Trump Media’s auditing firm and the auditor’s owner were accused on Friday of “Widespread fraud“By the SEC for work that affected more than 1,500 SEC filings, the federal regulator announced.
Auditor BF Borgers CPA and owner Benjamin Borgers agreed to be permanently suspended from practicing as accountants before the SEC, and also agreed to pay a combined civil fines of $14 million, while admitting or denying the allegations, the SEC said.
The agency, which described BF Borgers as a “phony audit mill,” said the company and its owner engaged in “deliberate and systematic failures to comply with the Public Company Accounting Oversight Board…Standards in its audits and reviews are included in more than 1,500 filings with the Securities Commission.” Finance and stock exchanges. From January 2021 until June 2023,” according to a press release.
Respondents were also accused of falsely telling clients that an auditor’s work would comply with PCAOB standards, fabricating audit documents to make it appear that the work conformed to those standards, and “falsely stating in audit reports included in more than 500 publicly traded corporations (SEC) companies,” the statement said. The company’s audits complied with PCAOB standards.
BF Borgers offices in Lakewood, Colorado.
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The SEC’s surprise action raised questions about the accuracy of financial information in thousands of reports issued by companies Borgers reviewed, including Trump Media, of which former President Donald Trump is a majority shareholder.
These reports, which are regularly filed with the Securities and Exchange Commission, provide key information that investors and analysts use to evaluate companies whose shares are traded on the public markets.
“Ben Borgers and his audit firm, BF Borgers, were responsible for one of the largest wholesale failures by gatekeepers in our financial markets,” Gurbir Grewal, director of the SEC’s Division of Enforcement, said in a statement.
“As a result of their fraudulent behavior, they not only put investors and markets at risk by causing public companies to incorporate non-compliant audits and reviews into more than 1,500 filings with the Commission, they also undermined confidence in our markets,” Grewal said. .
The stock price of Trump Media, which owns Truth Social, fell 9% shortly after trading began on Friday.
A Trump Media spokeswoman did not immediately respond for comment on the SEC complaint.
The company, whose shares only began trading publicly in late March after merging with a shell company, will have to find a new auditor as a result of the SEC’s action.
-Additional reporting by CNBC Brian Schwartz
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