Trump Media accounting firm charged with ‘massive fraud’

Trump Media accounting firm charged with ‘massive fraud’

BF Borgers, the Trump Media & Technology Group’s independent accounting firm, was charged by the Securities and Exchange Commission on Friday with widespread fraud and accused of operating a “bogus audit mill.”

The SEC did not allege wrongdoing against the owner of Truth Social Trump Media (DJT), which was not named in the charges from the regulator.

The SEC accused BF Borgers of “willful and systemic failures,” including “fabricating” audit documentation and falsely representing to clients that its work would comply with accounting standards.

The agency described this as a “massive” fraud that occurred between January 2021 and June 2023 that affected more than 1,500 SEC filings and more than 500 public companies.

The SEC imposed heavy penalties on BF Borgers, permanently suspending the firm from practicing as an accountant before the agency took immediate effect. The firm and its owner, Benjamin Borgers, also agreed to pay a collective $14 million fine.

“Borgers and his bogus audit factory have been permanently shut down,” Gurbir Grewal, director of the SEC’s enforcement division, said in a press release.

The public company that has hired BF Borgers will need to find a new accounting firm, the SEC informed the company in a separate statement on Friday.

Trump Media announced plans to do just that.

“Trump Media looks forward to cooperating with the new auditing partner in accordance with today’s SEC order,” Trump Media spokeswoman Shannon Devine told CNN in a statement.

According to the filing, Borgers served as Trump Media’s registered independent accounting firm before the social media company went public in March. Later in March, Trump Media’s audit committee approved the hiring of Borgers as the public company’s accounting firm.

While Trump Media may be BF Borgers’ highest-profile client, the firm has 350 clients during this time period subject to SEC rules, according to the agency.

The SEC review focused only on public companies, meaning BF Borgers’ work for Trump Media when it was private was not included.

BF Borgers did not respond to a request for comment.

Trump Media is chaired and majority owned by former President Donald Trump, who is also the most popular user on Truth Social.

Although Trump Media has reached a valuation north of $9 billion on Wall Street, the company generates little revenue and Truth Social remains a relatively small player in the world of social media.

Truth Social’s average daily US active users on iOS and Android fell 19% year over year in April to 113,000, according to Similarweb, a data intelligence company. X, the app formerly known as Twitter, has more than 300 times as many users.

The SEC found that of BF Borger’s 369 clients whose public filings incorporated the firm’s audits and reviews, at least 75% did not comply with accounting standards.

This isn’t the first time BF Borgers or its founders have run into trouble.

Since 2019, regulators in Colorado have repeatedly brought disciplinary actions against Borgers.

Last year, the International Society of Certified Professional Accountants terminated BF Borgers in its peer review program because the firm “was found to be so deficient in its performance that education and corrective and corrective actions were insufficient.”

Trump Media announced in late March that BF Borgers would be its public accountant.