The auditor for former president Donald Trump’s Trump Media was accused of running a “massive fraud” and a “sham audit mill” by the US’s top financial regulator on Friday.
BF Borgers and its owner Benjamin Borgers, whose clients include Trump Media, were charged by the US Securities and Exchange Commission (SEC) with a fraud that affected more than 1,500 SEC filings. Borgers has also acted for financial tech and crypto companies, SEC filings show.
BF Borgers agreed to pay a $12m civil penalty, and Benjamin Borgers agreed to pay a $2m civil penalty, to settle the SEC’s civil charges. They also agreed to permanent suspensions from practicing as accountants on SEC filings, effective immediately.
Borgers served as Trump Media’s auditor since 2022, according to its filings. Trump Media owns Donald Trump’s Truth Social social media platform.
It was not immediately clear which filings or companies had been affected.
“Trump Media looks forward to working with new auditing partners in accordance with today’s SEC order,” a spokesperson for Trump’s media company wrote in an email.
According to the SEC, Borgers did not properly prepare and maintain audit documentation, fabricated audit planning meetings and in some cases simply passed off previous audits for the current audit period.
“Ben Borgers and his audit firm, BF Borgers, were responsible for one of the largest wholesale failures by gatekeepers in our financial markets,” said Gurbir Grewal, director of the SEC’s division of enforcement.
“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.”
Of 369 BF Borgers clients whose filings from January 2021 through June 2023 incorporated BF Borgers’ audits and reviews, at least 75% incorporated audits that did not comply with the SEC’s rules.
BF Borgers acted for Trump Media during the period of the SEC’s complaint. In late March, Trump Media merged with a publicly traded shell company, Digital World Acquisition Corp, in a deal that valued the minnow social network at close to $8bn. The company now trades under the ticker symbol “DJT”, using Trump’s initials.
Trump Media’s shares have fallen sharply since their debut but despite skepticism of the value due to the social media site’s small size and the company’s financial difficulties, the stock has continued to significantly boost the former president’s wealth.
Trump Media’s share price dropped over 5% on Friday but ended the day down 1.54% and is up close to 14% over the last five trading days. The company is now valued at more than $6.5bn. Trump is the company’s largest shareholder and recently qualified for a bonus for the company’s share performance that boosted the paper value of his stake to $3.7bn.
Reuters contributed reporting