Trump Media & Technology Group dismissed its audit firm BF Borgers after the Securities and Exchange Commission permanently barred the company from serving as accountants.
Trump Media, the company behind former President Donald Trump’s Truth Social, said in an SEC filing on Friday that it replaced BF Borgers with the Phoenix, Arizona-based firm Semple, Marchal & Cooper. Trump Media said the decision to change independent registered public accounting firms was made with the recommendation and approval of its audit committee.
The company said that during the 2022 and 2023 fiscal years, through the date of the filing, there were no disagreements between Trump Media and BF Borgers “on any matter of accounting principles or practices, financial statement disclosure, or auditing scope or procedure.” Any disagreements, if not resolved to the audit firm’s satisfaction, would have resulted in references within Borgers’ audit reports, the company said.
The SEC informed Trump Media that it could indicate that BF Borgers is not permitted to appear or practice before the SEC — per its order— in lieu of obtaining a letter from Borgers stating whether or not it agrees with the company’s statements.
The SEC on Friday charged Borgers and its managing partner, Benjamin Borgers, with failure to comply with Public Company Accounting Oversight Board (PCAOB) standards in audits and reviews of more than 1,500 SEC filings between January 2021 and June 2023, the agency said. Gurbir Grewal, director of the SEC’s Division of Enforcement, called BF Borgers a “sham audit mill.”
BF Borgers agreed to pay a $12 million civil penalty to settle the charges, and managing partner Benjamin Borgers agreed to pay a $2 million civil penalty. Both agreed to permanent suspensions from serving as accountants before the SEC, effective immediately. They did not admit to or deny the SEC’s findings.
“Ben Borgers and his audit firm, BF Borgers, were responsible for one of the largest wholesale failures by gatekeepers in our financial markets,” Grewal said in a statement. He said their “fraudulent conduct” put investors and markets at risk and undermined trust in U.S. markets.
Trump Media first hired BF Borgers on Jan. 22, 2022, when the former president’s firm was still a privately-held company. The accountant was still Trump Media’s independent registered public accounting firm as of April 1, according to a filing with the SEC.
The firm and Borgers were also charged with falsely representing their work to clients as compliant with PCAOB standards, fabricating audit documentation to make it look PCAOB compliant, and falsely stating in audit reports included in more than 500 public company SEC filings that its audits complied with the standards.
The Lakewood, Colorado-based Borgers had a record of poor performance and regulatory scrutiny. The Canadian Public Accountability Board (CPAB) banned Borgers from accepting new audit clients in Canada, according to an enforcement action drafted in December. The company doesn’t have offices in Canada and audited fewer than 50 Canadian reporting issuers, according to the CPAB document.
Last November, the American Institute of Certified Public Accountants’ (AICPA) peer review program terminated Borgers’ enrollment in the program for “failure to cooperate because the firm was found to be so seriously deficient in its performance that education and remedial, corrective actions are not adequate.”