SEC charges Trump Media auditor with ‘massive fraud’ on hundreds of companies, imposes lifetime ban

The
auditing
firm
for


Trump
Media
and
the
auditor’s
owner
were
charged
Friday
with “massive
fraud”
by
the

Securities
and
Exchange
Commission
for
accounting
work
that
affected
more
than
1,500
SEC
filings,
the
federal
regulator
announced.

The
auditor,

BF
Borgers
CPA,
and
its
owner,
Benjamin
Borgers,
have
agreed
to
be
permanently
suspended
from
practicing
as
accountants
before
the
SEC,
and
also
agreed
to
pay
a
combined
$14
million
in
civil
penalties,
without
admitting
or
denying
the
allegations,
the
SEC
said.

The
agency,
calling
BF
Borgers
a “sham
audit
mill,”
said
the
company
and
its
owner “deliberately
systematically
failed
to
conduct”
audits
and
quarterly
reviews
incorporated
in
more
than
1,500
SEC
filings
from
January
2021
through
June
2023
in
accordance
with
Public
Company
Accounting
Oversight
Board standards.

The
SEC
said
the
Lakewood,
Colorado-based
auditor
lied
to
clients
by
saying
its
work
complied
with
PCAOB
standards,
fabricated
audit
documents
to
make
it
seem
that
the
work
did
comply
with
those
standards,
and
falsely
claims
in
audit
reports
included
in
more
than
500
public
company
SEC
filings
that
the
firm’s
audits
complied
with
such
standards.

BF
Borgers
during
the
period
covered
by
the
SEC
complaint
acted
as
the
auditor
for
Trump
Media,
which
was
then
privately
held
and
moving
toward
a
planned
merger
with
the
publicly
traded
shell
company
Digital
World
Acquisition
Corp.

Trump
Media
and
DWAC
finalized
that
merger
in
late
March
2024,
leading
to
Trump
Media
becoming
publicly
traded
under
the
DJT
ticker.

Three
days
after
the
company
went
public,
Trump
Media’s
board
approved
keeping
BF
Borgers
on
as
the
company’s
auditors
for
2024.

“Ben
Borgers
and
his
audit
firm,
BF
Borgers,
were
responsible
for
one
of
the
largest
wholesale
failures
by
gatekeepers
in
our
financial
markets,”
the
SEC’s
enforcement
division
director,
Gurbir
Grewal,
said
in
a
statement.

“As
a
result
of
their
fraudulent
conduct,
they
not
only
put
investors
and
markets
at
risk
by
causing
public
companies
to
incorporate
noncompliant
audits
and
reviews
into
more
than
1,500
filings
with
the
Commission,
but
also
undermined
trust
and
confidence
in
our
markets,”
Grewal
said.

BF
Borgers
did
not
immediately
respond
to
requests
for
comment
by
CNBC.

The
bombshell
SEC
action
raised
questions
about
the
accuracy
of
the
financial
information
in
thousands
of
reports
that
were
issued
by
the
companies
Borgers
audited,
including
Trump
Media,
whose
majority
shareholder
is
former
President

Donald
Trump.

These
reports,
filed
regularly
with
the
SEC,
provide
essential
information
that
investors
and
analysts
use
to
evaluate
companies
whose
stock
trades
on
public
markets.

The
SEC
said
that
reports
filed
by
companies
that
used
BF
Borgers
as
its
auditors “do
not
necessarily
need
to
be
amended
solely
because
of
the
Commission’s
entry
of
the
Order.”

“However,
issuers
should
consider
whether
their
filings
may
need
to
be
amended
to
address
any
reporting
deficiencies
arising
from
the
BF
Borgers
engagement,”
the
SEC
said,
while
also
noting
that
companies
that
had
used
Borgers
now
need
to
find
a
new
qualified
public
accountant.

As
of
Friday
morning,
the
investor
relations
page
on
Trump
Media’s

website
still
listed
BF
Borgers
as
the
independent
auditor
of
the
company.

But
Trump
Media
spokeswoman
Shannon
Devine
told
CNBC, “Trump
Media
looks
forward
to
working
with
new
auditing
partners
in
accordance
with
today’s
SEC
order.”

The
share
price
of
Trump
Media,
which
owns
the
Truth
Social
app,
on
Friday
was
down
as
much
as
9%
before
paring
back
that
loss
to
a
decline
of
1.7%.

—

Additional
reporting
by
CNBC’s


Brian
Schwartz.

Correction:
The
auditor,
BF
Borgers
CPA,
and
its
owner,
Benjamin
Borgers,
agreed
to
pay
a
combined
$14
million
in
civil
penalties,
without
admitting
or
denying
the
allegations,
the
SEC
said.
An
earlier
version
misstated
the
terms.

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