SEC charges firm that audits Trump’s social-media company with ‘massive fraud’ affecting hundreds of filings
The auditing firm used by Donald Trump’s social-media company, Trump Media & Technology Group Corp., has been charged with “massive fraud” by the Securities and Exchange Commission for work done for hundreds of companies on more than 1,500 regulatory filings.
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The regulatory agency said that hundreds of audits done by BF Borgers CPA PC contained “deliberate and systemic failures” that included false documentation to make it appear its reports complied with standards set by the Public Company Accounting Oversight Board.
The SEC said the firm and its owner, Benjamin F. Borgers, have agreed to a permanent bar from working as accountants for companies making filings with the agency and to pay civil penalties of $14 million.
“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 enforcement division. “As a result of their fraudulent conduct, they not only put investors and markets at risk by causing public companies to incorporate noncompliant audits and reviews into more than 1,500 filings with the commission, but also undermined trust and confidence in our markets.”
A message left by MarketWatch at BF Borgers’s offices in Lakewood, Colo., wasn’t immediately returned.
According to an order issued by the SEC, BF Borgers was charged with falsely telling clients that its work complied with the accounting oversight board’s standards and that it fabricated audit documents to make it seem that the standards had been met.
The SEC said that of filings made by 369 BF Borgers clients between January 2021 and June 2023, 75% included audit information that did not comply with standards.
The SEC did not name the firms whose filings had been affected. The firm has provided auditing services to Trump Media & Technology Group DJT, which operates the Truth Social platform, since 2022.
A message sent to representatives of Trump’s media company wasn’t immediately returned.
The company began trading publicly in March after completing a merger with a special-purpose acquisition corporation, or blank-check company, called Digital World Acquisition Corp.
The ticker symbol was changed from “DWAC” to “DJT,” representing the former president’s initials, when the deal closed.
From the archives (July 2023): Digital World Acquisition stock soars, as the SPAC taking Donald Trump’s Truth Social public settles fraud charges
Shares have closed trading sessions at levels as high as $66 and as low as $22 since the company went public. The stock’s price has doubled in recent weeks as the company has gone on a campaign against short sellers.
On Friday, shares shed about 1% to close at $47.48, on a significant up day for the broader U.S. stock market that saw, for example, the tech-dominated Nasdaq Composite COMP surge nearly 2% and the benchmark S&P 500 SPX rally 1.26%. The Trump stock had been down sharply early in the day.
Read on:
What Trump Media gets wrong when blaming short sellers for DJT stock volatility
Trump Media’s fight turns to legal short selling, as ‘DJT’ shares rise again
Why shorting Trump’s DJT stock could cost you a 500% fee
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