The impartial accounting firm for Trump Media & Technology Group has been charged by the Securities and Exchange Commission with substantial fraud.
BF Borgers, and its proprietor Benjamin F. Borgers, face allegations that they have been working a “sham audit mill,” the SEC stated in a statement on Friday.
No allegations of wrongdoing towards Trump Media, the proprietor of Truth Social, have been put ahead by the fee.
The SEC alleges that Colorado-based firm dedicated “deliberate and systemic failures,” resembling “fabricating” audit paperwork and falsely telling shoppers that their work was compliant with accounting requirements.
The fee alleges that “massive” fraud occurred between January 2021 and June final 12 months. It’s alleged to have impacted 1,500 SEC filings and upwards of 500 public firms.
Gurbir Grewal, director of the SEC’s Division of Enforcement, stated in an announcement that “Ben Borgers and his audit firm, BF Borgers, were responsible for one of the largest wholesale failures by gatekeepers in our financial markets”.
He added: “As a result of their fraudulent conduct, they not only put investors and markets at risk by causing public companies to incorporate non-compliant audits and reviews into more than 1,500 filings with the Commission but also undermined trust and confidence in our markets.”
In order to settle the fees, the firm has agreed to pay a penalty of $12m, and Mr Borgers agreed to pay a penalty of $2m.
Both the firm and Mr Borgers agreed to “permanent suspensions” from showing earlier than the fee.
“Because investors rely on the audited financial statements of public companies when making their investment decisions, the accountants and accounting firms that audit those statements play a critical role in our financial markets,” Mr Grewal stated.
“Borgers and his firm completely abandoned that role, but thanks to the painstaking work of the SEC staff, Borgers and his sham audit mill have been permanently shut down.”
The order from the SEC additionally discovered that the firm didn’t correctly “supervise and review” its audits.
“Without admitting or denying the SEC’s findings as to each of them, BF Borgers and Benjamin Borgers both consented to an order, effective immediately, pursuant to which they are ordered to pay civil penalties and are denied the privilege of appearing or practicing before the Commission as an accountant,” the SEC stated in its statement.
In one other assertion on Friday, the SEC advised firms that they must discover new accounting companies.
“Trump Media looks forward to working with new auditing partners in accordance with today’s SEC order,” Trump Media spokesperson Shannon Devine advised The Independent.
Filings present that Borgers was Trump Media’s impartial accounting firm earlier than it went public in March. Later that very same month, the Trump Media audit committee gave the inexperienced mild to hiring Borgers because the accounting firm for the now-public firm.
The Independent has contacted BF Borgers for remark.
Former president Donald Trump is the chair and majority proprietor of Trump Media, and whereas the group obtained a $9bn valuation on Wall Street, it doesn’t create a lot income. Truth Social additionally stays a small platform amongst different social media apps.