BF Borgers, the independent accounting firm of the Trump Media & Technology Group, was accused by the United States Securities and Exchange Commission (SEC) this Friday (3) of widespread fraud and operating a “fake audit factory.”
The SEC has not made any allegations of wrongdoing against Truth Social's owner, Trump Media (DJT), which is not named in the regulator's charges.
The SEC accused BF Borgers of “deliberate and systemic failures,” including “fabricating” audit documentation and falsely representing to clients that its work would comply with accounting standards.
The agency described it as a “massive” fraud that occurred between January 2021 and June 2023 that impacted more than 1,500 SEC filings and more than 500 public companies.
The SEC has imposed a severe penalty against BF Borgers, permanently suspending the company from performing accounting work with immediate effect. The company and its owner, Benjamin Borgers, also agreed to collectively pay $14 million in fines.
“Borgers and his fake audit factory have been permanently shut down,” said Gurbir Grewal, director of the SEC's enforcement division, in a press release.
Public companies that hired BF Borgers will need to find new accounting firms, the SEC warned in a separate statement on Friday.
Trump Media has announced plans to do just that.
“Trump Media looks forward to working with new audit partners in accordance with today’s SEC order,” Trump Media spokeswoman Shannon Devine told CNN in a statement.
According to the filings, Borgers served as Trump Media's independent registered accounting firm before the social media company went public in March. Later in March, Trump Media's audit committee approved hiring Borgers as the public company's accounting firm.
While Trump Media may be BF Borgers' highest-profile client, the company had 350 clients during that period, subject to SEC rules, according to the agency.
The SEC's review focused only on public companies, meaning BF Borgers' work for Trump Media when it was private was not included.
BF Borgers did not respond to a request for comment.
Trump Media is chaired and majority owned by former President Donald Trump, who is also Truth Social's most popular user.
Even though Trump Media has achieved a $9 billion valuation on Wall Street, the company generates little revenue and Truth Social remains a relatively small player in the world of social media.
Truth Social's average daily active users in the U.S. on iOS and Android fell 19% in April from a year earlier to 113,000, according to Similarweb, a data intelligence company. X, the app formerly known as Twitter, has more than 300 times more users.
Source: CNN Brasil
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