The US Securities and Exchange Commission (SEC) announced on Friday the closure of auditor BF Borgers, which has been described as one of the most active auditors of US public companies. The shutdown came amidst allegations of massive fraud impacting over 1,500 SEC filings.
Trump Media is among the auditor’s clients, though the SEC did not make any allegations of wrongdoing against the media company, and the company was not mentioned in the charges brought forth by the regulator.
The SEC accused BF Borgers of “deliberate and systemic failures,” which included fabricating audit documentation and falsely assuring clients that its work would adhere to accounting standards. The agency described this as “massive” fraud occurring between January 2021 and June 2023, affecting over 1,500 SEC filings and more than 500 public companies.
Borgers has agreed to a civil penalty of $12 million, and the owner, Benjamin Borgers, has agreed to pay $2 million to settle the SEC's charges. The company also has consented to permanent suspensions from practicing as accountants on SEC filings, effective immediately.
According to filings, Borgers acted as Trump Media's independent registered accounting firm before the social media company went public in March. Subsequently, in March, Trump Media's audit committee sanctioned the hiring of Borgers as the public company's accounting firm. While Trump Media may be the most prominent client of BF Borgers, the firm had 350 clients subject to SEC rules during this period, as per the agency's information.
The SEC has stated that a “significant” number of listed companies will need to switch accountants in the upcoming days as a result of the enforcement action.
A spokesperson for Trump Media told Reuters that the company looks forward to working with new auditing partners in accordance with today's SEC order.
According to SEC Enforcement Division Director Gurbir Grewal, Ben Borgers and his audit firm, BF Borgers, were responsible for one of the largest wholesale failures by gatekeepers in our financial markets.
Read the SEC press release here.
