SEC accuses Trump Media’s auditor of running 'sham audit mill'; stock price drops

Securities and Exchange Commission charged Trump Media & TechnologyGroup’sindependent accounting firm, BF Borgerswithwidespread fraud on Friday (May 3). While the SEC accused the Lakewood, Colorado-based auditor of operating a“sham audit mill,”it did not makeallegations of wrongdoing against Truth Social owner Trump Media.

Whatare the accusations againstBF Borgers?

"The Securities and Exchange Commission today charged audit firm BF Borgers CPA PC and its owner, Benjamin F. Borgers (together,“Respondents”), with deliberate and systemic failures to comply with Public Company Accounting Oversight Board (PCAOB) standards in its audits and reviews incorporated in more than 1,500 SEC filings from January 2021 through June 2023,"SEC said in a press release.

"The SEC also charged the Respondents with falsely representing to their clients that thefirm’swork would comply with PCAOB standards; fabricating audit documentation to make it appear that thefirm’swork did comply with PCAOB standards; and falsely stating in audit reports included in more than 500 public company SEC filings that thefirm’saudits complied with PCAOB standards"the SEC statement added.

The SEClevieda harsh penalty on BF Borgers, permanently barring the firm from operating as accountants.The company and its owner, Benjamin Borgers, also agreed to pay a combined $14 million in fines.

“Borgers and his sham audit mill havebeen permanently shut down,”Gurbir Grewal, director of theSEC’senforcement division, said in a press release.

Companies that have employed BF Borgerswill need tolook for new accounting firms. SECalerted those companies in a separate statement issued on Friday. Trump Media has announced that it is alsolooking fora new accounting firm.

Trump Media'sstock price falls

Shortly after trading began on Friday, Trump Media, the company that controls the Truth Social app, saw its stock price fall 9 percent.

Borgers worked as TrumpMedia'sindependent registered accounting firm before the social media company went public in March. Later in March, TrumpMedia'saudit committee authorisedBorgers'appointment as the publiccompany'saccounting firm.