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The audit firm for Trump media and the controller’s owner were charged Friday with “massive fraud“from Capital Market Commission for accounting work that affected more than 1,500 SEC filings, the federal regulator announced.
The controller, BF Borgers CPAand its owner, Benjamin Borgers, agreed to be permanently disbarred before the SEC, and also agreed to pay a total of $14 million in civil penalties, without admitting or denying the allegations, the SEC said.
The agency, calling BF Borgers a “bogus audit mill,” said the company and its owner “willfully and systematically failed” audits and quarterly reviews incorporated into more than 1,500 SEC filings from January 2021 to June 2023, according to with Public Company Accounting Oversight. Plank standards.
The SEC said the Lakewood, Colo.-based auditor lied to clients that his work complied with PCAOB standards, fabricated audit documents to make it appear that the work complied with those standards and made false claims in audit reports that included in more than 500 of the company’s public SEC filings that the company’s controls complied with those standards.
BF Borgers during the period covered by the SEC complaint acted as auditor for Trump Media, which was then privately held and was moving toward a planned merger with publicly traded shell company Digital World Acquisition Corp.
Trump Media and DWAC completed this merger at the end of March 2024, resulting in Trump Media becoming publicly traded under the ticker DJT.
Three days after the company went public, Trump Media’s board approved retaining BF Borgers as the company’s auditors through 2024.
BF Borgers offices in Lakewood, Colorado.
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“Ben Borgers and his audit firm, BF Borgers, were responsible for one of the largest wholesale failures of watchdogs in our financial markets,” SEC 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 forcing public companies to incorporate non-compliant audits and reviews into more than 1,500 filings with the Commission, but also undermined trust and confidence in our markets,” said Grewal. .
BF Borgers did not immediately respond to requests for comment from CNBC.
The SEC’s bombshell action raised questions about the accuracy of financial information in thousands of reports issued by the companies Borgers controlled, including Trump Media, whose majority shareholder is former President Donald Trump.
These reports, filed regularly with the SEC, provide key information that investors and analysts use to evaluate publicly traded companies.
The SEC said reports filed by companies that used BF Borgers as their auditors “do not necessarily need to be amended solely because of the Commission’s introduction of the order.”
“However, issuers should consider whether their filings may need to be amended to address any reporting deficiencies resulting from BF Borgers’ engagement,” the SEC said, noting that companies that had used Borgers must now to find a new certified public accountant.
As of Friday morning, the Trump Media investor relations page Website continues to recommend BF Borgers as the company’s independent auditor.
However, Trump Media spokeswoman Shannon Devine told CNBC, “Trump Media looks forward to working with new regulatory partners pursuant to today’s SEC order.”
The share price of Trump Media, which owns the Truth Social app, fell as much as 9% on Friday before reversing that loss to fall 1.7%.
— Additional reporting from CNBC Brian Schwartz.
Correction: The auditor, BF Borgers CPA, and its owner, Benjamin Borgers, agreed to pay a total of $14 million in civil penalties without admitting or denying the allegations, the SEC said. An earlier version provided the terms incorrectly.
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