Trump Media's Newly Hired Auditing Firm Faces SEC Fraud Charges

SEC Accuses Auditing Firm Hired by Trump Media of "Massive Fraud"

May 4, 2024 - 07:59
May 4, 2024 - 07:59
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Trump Media's Newly Hired Auditing Firm Faces SEC Fraud Charges
Trump Media's Newly Hired Auditing Firm Faces SEC Fraud Charges

The Securities and Exchange Commission (SEC) has charged auditing firm BF Borgers, recently hired by Trump Media and Technology Group, with "massive fraud." The charges are not related to any work conducted for former President Donald Trump's media company.

BF Borgers and its owner, Benjamin F. Borgers, were charged with "deliberate and systematic failures" in over 1,500 audits. Allegations include violations of accounting rules, falsification of documentation to conceal shortcomings, and misrepresentation of audit standards compliance in audit reports.

To settle the charges, BF Borgers agreed to a $12 million fine, while Benjamin Borgers agreed to pay $2 million. BF Borgers and Benjamin Borgers are also subject to permanent suspensions, barring them from handling SEC-related matters as accountants.

Trump Media appointed BF Borgers as its auditor on March 28, as disclosed in the company's recent annual report filing. This follows BF Borgers' handling of audits before Trump Media's merger with Digital World Acquisition Corp.

Previously, Trump Media had changed auditors multiple times, with one resigning in July 2023 and another terminated in March. Despite the recent re-hiring of BF Borgers, the company now looks forward to collaborating with new auditing partners.

The SEC investigation revealed BF Borgers' shortcuts, including copying audit documentation from previous years, altering dates, and presenting it as current. False documentation included planning meetings that never occurred and misrepresented approval by Borgers and another reviewer.

Gurbir Grewal, director of the SEC's enforcement division, condemned Borgers and BF Borgers for their "wholesale failures," emphasizing the SEC's efforts to permanently close down their operations.

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