The U.S. Securities and Exchange Commission (SEC) has accused the accounting firm BF Borgers CPA PC of engaging in large-scale audit fraud, affecting over 1,500 regulatory files.
BF Borgers CPA PC is known to have provided services to former President Trump’s “Truth Social.” However, regulatory authorities did not specify whether the documents submitted by Trump Media were related to the suspected fraudulent activities of this accounting firm.
In a press release issued on Friday, the SEC stated that BF Borgers CPA PC and its founder Benjamin Borgers will face permanent suspension of their practice and accounting qualifications, as well as a $14 million fine to close the investigation.
Gurbir Grewa, the SEC enforcement chief, stated in a press release, “For what we see as a wholesale failure by Borgers and his auditing firm BF Borgers, they bear responsibility. Auditors and accounting firms play a crucial role in the financial markets as investors rely on audited financial statements of public companies to make investment decisions. Borgers and his company completely disregarded this role. Thanks to the hard work of SEC staff, Borgers and his fraudulent audit factory have been permanently shut down.”
BF Borgers did not immediately respond to media requests for comments on Friday morning.
It is one of the most prolific auditing service institutions in the United States.
According to BF Borgers, the company was one of the top ten auditing firms with the most publicly traded clients in 2023.
BF Borgers is facing regulatory scrutiny in both Canada and the United States. In its recent annual inspections, the U.S. auditing regulatory body, the Public Company Accounting Oversight Board (PCAOB), stated that the defect rate in their audit samples for 2021 and 2022 was 100%.
The auditing regulatory agency mentioned that BF Borgers, with hundreds of clients, had more than doubled its client count from 2019 to 2021 without increasing staff to handle the additional workload. In an expanded inspection report, the regulatory agency noted that only one employee was responsible for 147 audits.
Issues identified by the SEC include falsified audit work papers, “non-existent work,” and fabricated meetings at BF Borgers.
The SEC has not yet commented on BF Borgers’ audit work for the Trump Media Technology Group.
A representative of the Trump Media company stated, “We will comply with today’s SEC order and look forward to working with new audit partners.”
The details of the settlement agreement reached between regulatory authorities and BF Borgers do not specify whether Trump Media is one of the companies implicated in the suspected fraud by the accounting firm.
Trump Media has been using the services of accounting firms since 2022 and continued to utilize auditing services even after going public. The inspections by the Public Company Accounting Oversight Board have not covered BF Borgers’ audits for Trump Media.
The social media company of the former president is the largest client by market value on BF Borgers’ client list.