Trump Media’s accounting firm accused of ‘massive fraud’

BF Borgers, the independent accounting firm for Trump Media & Technology Group, has been hit with severe fraud charges by the Securities and Exchange Commission (SEC), which branded the firm a “sham audit mill.” This announcement was made public on Friday.

While the SEC’s allegations did not implicate Trump Media, the owner of Truth Social, the firm BF Borgers was accused of significant malpractices. These included creating fake audit documents and misleading clients about adhering to proper accounting standards.

The accusations detail a major fraud operation affecting over 1,500 SEC filings and involving more than 500 public companies from January 2021 to June 2023. As a result, BF Borgers has been banned from practicing as accountants before the SEC and, along with its owner Benjamin Borgers, has agreed to pay fines totaling $14 million.

Gurbir Grewal, the director of the SEC’s enforcement division, stated that Borgers and his firm have been decisively shut down.

Following these developments, public companies previously audited by BF Borgers are now tasked with finding new auditors, a directive that has been strongly emphasized by the SEC.

In response, Trump Media announced it is seeking new audit partners to comply with the SEC’s orders, according to spokesperson Shannon Devine.

BF Borgers was involved with Trump Media as its independent registered accounting firm before the social media company became public in March. Subsequently, Trump Media’s audit committee appointed Borgers as the accounting firm for the publicly traded company.

Although Trump Media is just one of BF Borgers’ numerous clients during this period, the SEC’s investigation focused solely on public companies, meaning the firm’s work for Trump Media while it was still private did not fall under this scrutiny.

BF Borgers has not made any public comments in response to these charges.

Trump Media, led and majorly owned by former President Donald Trump, has seen significant market valuation but limited revenue generation. Truth Social, under Trump’s leadership, remains a minor entity in the social media landscape compared to platforms like X (formerly Twitter).

Data from Similarweb highlights that Truth Social’s average daily active U.S. users on iOS and Android have declined by 19% year-over-year in April to 113,000, significantly fewer than X’s user base.

The SEC’s findings indicate that a vast majority of the public filings that included audits and reviews by BF Borgers did not meet required accounting standards. This is not the first instance of misconduct by BF Borgers or its founder, as regulatory bodies have taken disciplinary actions against them in the past, including termination from the Association of International Certified Professional Accountants’ peer review program due to severe deficiencies.