Denver, CO – Trump Media’s stock price took a hit on Friday following accusations of massive fraud against its auditor, BF Borgers, by the Securities and Exchange Commission.
The SEC alleged that BF Borgers failed to comply with common accounting standards, resulting in a significant drop in the media company’s shares. The stock plummeted as much as 9% on Friday morning.
According to a recent filing, the SEC charged BF Borgers CPA PC for engaging in a fraudulent scheme that spanned over two years. The firm, responsible for auditing Trump Media’s financials, was found to have deliberate and systemic failures in adhering to public company accounting standards.
The regulatory agency accused the firm and its owner, Benjamin Borgers, of falsely representing that audits met common accounting standards and fabricating audit documents. These actions affected approximately 1,500 SEC filings from January 2021 to mid-2023, although specific clients were not named.
In response to the charges, BF Borgers settled with the SEC by paying a $12 million penalty, while Benjamin Borgers personally paid a separate $2 million penalty. The company has since ceased operations permanently, and Borgers agreed to halt his accounting practice.
Gurbir Grewal, the director of the SEC’s Division of Enforcement, emphasized the crucial role that accountants and accounting firms play in financial markets. He commended the SEC staff for shutting down Borgers and his firm, labeling their actions as one of the largest failures by gatekeepers in financial markets.
Despite the initial stock drop, Trump Media announced that they were seeking a new auditor to comply with the SEC order. A spokesperson for TMTG expressed optimism about working with auditing partners moving forward.
BF Borgers did not provide immediate comment in response to a request for statement from BI. The fallout highlights the importance of accountability and transparency in financial reporting, as investors rely heavily on accurate audited financial statements when making investment decisions.