Trump Media’s stock price plummets as SEC charges auditor of ‘massive fraud’, imposes lifetime ban

May 03, 2024

The Securities and Exchange Commission (SEC) on Friday accused BF Borgers, the independent accounting firm for Trump Media & Technology Group, of conducting a “sham audit mill” and of committing extensive fraud.

The Lakewood, Colorado-based auditor, was accused of lying to clients about the compliance of its work with PCAOB standards and of and “fabricating” audit documents. According to the SEC, it fabricated audit documents to give the perception that the work was in accordance with those regulations, and made false claims in audit reports cited in the SEC filings of over 500 public companies that the firm’s audits adhered to those requirements.

Without acknowledging or disputing the accusations, the auditor, BF Borgers CPA, and its owner, Benjamin Borgers,

have agreed to a permanent ban from practicing accounting before the SEC. They have also agreed to pay a total of $14 million in civil penalties.

In a press release, Gurbir Grewal, Director of SEC Enforcement Division, said: “Ben Borgers and his audit firm, BF Borgers, were responsible for one of the largest wholesale failures by gatekeepers in our financial markets.”

“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,” he added.

Trump Media reacts as its stock price plummets

The SEC informed corporations in a separate statement on Friday that public companies that employed BF Borgers will have to locate new accounting firms.

Shortly after trading started on Friday, the share price of Trump Media, the company that owns the Truth Social app, fell by 9 percent.

In line with today’s SEC ruling, Trump Media revealed its plans to do so.

Speaking to CNN, Trump Media spokesperson Shannon Devine said: “Trump Media looks forward to working with new auditing partners in accordance with today’s SEC order.”

Trump Media registered as an accounting firm before the social media giant went public in March, according to documents. Trump Media’s audit committee accepted the appointment of Borgers as the public firm’s accounting firm later in March.

The shocking SEC move raised concerns about the financial information submitted in several reports that were released by the firms Borgers audited, including Trump Media, whose primary shareholder is former President Donald Trump.

Source: Hindustan Times