May 19, 2024

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New audit firm hired by Trump Media busted by SEC for ‘massive fraud’

New audit firm hired by Trump Media busted by SEC for ‘massive fraud’

SAN FRANCISCO (AP) — The Securities and Exchange Commission on Friday charged an audit firm hired by Trump Media and Technology Group just 37 days ago with “large-scale fraud” — but not for any work it did for former President Donald Trump’s media company.

The Securities and Exchange Commission charged accounting firm BF Borgers and its owner, Benjamin F. Borgers, with “willful and systematic failures” in more than 1,500 audits. The accusations include failing to adhere to accounting rules, fabricating documents to cover up deficiencies, and falsely indicating in audit reports that its work met auditing standards.

To settle the SEC charges, BF Borgers agreed to pay a $12 million fine while its owner agreed to pay a $2 million penalty, according to the SEC. Benjamin Borgers did not immediately return a phone call seeking comment.

BF Borgers and Benjamin Borgers also agreed to a permanent suspension, effective immediately, which will prevent them from handling SEC-related matters as accountants.

Trump Media appointed BF Borgers as its auditor on March 28, it said The company’s latest annual report. The company revealed at the time that BF Borgers had also taken over its audits before the company went public through a merger with the company. A cash-rich shell company called Digital World Acquisition Corp.

The company had previously rotated through at least two other auditors — one who resigned from the account in July 2023 and another who was terminated by the board in March, just as it was rehiring BF Borgers.

Trump Media said in a statement that it “looks forward to working with new audit partners in accordance with today’s SEC order.”

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The SEC found that BF Borgers’ shortcuts involved copying audit documents from the previous year, changing the relevant dates and then passing them off as current documents. In addition to falsely documenting work that was never actually performed, this false documentation detailed planning meetings with clients that never occurred and “misrepresented” that both Benjamin Borgers and another auditor had approved the audit work.

“Ben Borgers and his audit firm, BF Borgers, were responsible for one of the largest wholesale failures by gatekeepers in our financial markets,” said Gurbir Grewal, director of the SEC’s Division of Enforcement. “Thanks to the painstaking work of SEC staff, Borgers and his bogus audit mill have been permanently closed.”