Trump Media auditor charged by SEC with ‘massive fraud,’ permanently barred from public company audits

The auditing firm for Trump Media and the auditor’s owner were charged Friday with “massive fraud” by the Securities and Exchange Commission for work that affected more than 1,500 SEC filings the federal regulator announced.

The auditor, BF Borgers CPA and its owner Benjamin Borgers have agreed to be permanently suspended from practicing as accountants before the SEC, and also agreed to pay a combined $14 million in civil penalties, with admitting or denying the allegations, the SEC said.

The agency, calling BF Borgers a “sham audit mill,” said the company and its owner engaged in “deliberate and systemic failures to comply with Public Company Accounting Oversight Board … standards in its audits and reviews incorporated in more than 1,500 SEC filings from January 2021 through June 2023,” according to a press release.

The respondents also were charged with falsely telling clients that the auditor’s work would comply with PCAOB standards, with fabricating audit documents to make it seem that the work did comply with those standards, and “falsely stating in audit reports included in more than 500 public company SEC filings that the firm’s audits complied with PCAOB standards,” the release said.

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

“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,” Grewal said.

The share price of Trump Media, which owns the Truth Social app, was down 9% shortly after trading began Friday.

A spokeswoman for Trump Media did not immediately respond to comment on the SEC complaint.

The company, whose stock began public trading only in late March after a merger with a shell company, will have to find a new auditor as a result of the SEC action.

– Additional reporting by CNBC’s Brian Schwartz

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