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Auditing company for Trump media The Securities and Exchange Commission on Friday charged the Securities and Exchange Commission and its auditor Malik with “large-scale fraud” over accounting work that affected more than 1,500 SEC filings, the federal regulator announced.
The auditor, BF Borgers CPA, and its owner, Benjamin Borgers, agreed to be permanently suspended from practicing as accountants before the SEC, and also agreed to pay a combined $14 million in civil penalties, without admitting or denying the allegations, the SEC said. . He said.
The agency, which called BF Borgers a “phony audit mill,” said the company and its owner “willfully systematically failed to conduct” the quarterly audits and reviews included in more than 1,500 SEC filings from January 2021 through June 2023, according to a watchdog. Public corporate accounting. Council standards.
The Lakewood, Colo.-based auditor lied to clients by saying his work complied with PCAOB standards, fabricated audit documents to make it appear the business complied with those standards, and false claims in audit reports included in more than 500 public reports, the SEC said. . The company's filings with the Securities and Exchange Commission (SEC) that the company's audits complied with these standards.
During the period covered by the SEC's complaint, BF Borgers served as auditor for Trump Media, which at the time was privately owned and moving toward a planned merger with the shell company Digital World Acquisition Corp.
Trump Media and DWAC completed this merger in late March 2024, resulting in Trump Media trading publicly under the ticker DJT.
Three days after the company went public, Trump Media's board of directors agreed to retain BF Borgers as the company's auditors for 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 by gatekeepers in our financial markets,” Gurbir Grewal, director of the SEC’s Division of Enforcement, said in a statement.
“As a result of their fraudulent behavior, they not only put investors and markets at risk by causing public companies to incorporate non-compliant audits and reviews into more than 1,500 filings with the Commission, they also undermined confidence in our markets,” Grewal said. .
BF Borgers did not immediately respond to requests for comment from CNBC.
The SEC's surprise action raised questions about the accuracy of financial information in thousands of reports issued by companies Borgers reviewed, including Trump Media, of which former President Donald Trump is a majority shareholder.
These reports, which are regularly filed with the Securities and Exchange Commission, provide key information that investors and analysts use to evaluate companies whose shares are traded on the public markets.
Reports filed by companies that used BF Borgers as their auditors “do not necessarily need to be amended solely because of the Commission's entry into the matter,” the SEC said.
“However, issuers should consider whether their filings may need to be amended to address any reporting deficiencies arising from BF Borgers’ participation,” the SEC said, while also noting that companies that used Borgers now need to find New qualified public accountant.
As of Friday morning, the investor relations page on Trump Media's website still lists BF Borgers as the company's independent auditor.
But Shannon Devine, a spokeswoman for Trump Media, told CNBC: “Trump Media looks forward to working with new audit partners in accordance with today’s SEC order.”
The share price of Trump Media, which owns Truth Social, fell as much as 9% on Friday before paring that loss to a 1.7% decline.
—Additional reporting by CNBC's Brian Schwartz.
Correction: The Securities and Exchange Commission said auditor BF Borgers CPA and owner Benjamin Borgers agreed to pay $14 million in civil penalties, without admitting or denying the allegations. A previous version made a mistake in the terms.
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