May 22, 2024

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Trump Media shares decline as SEC accuses its auditor of ‘massive fraud’

Trump Media shares decline as SEC accuses its auditor of ‘massive fraud’

GT

  • Trump Media’s stock price fell on Friday after its auditor was accused of “massive fraud.”

  • Auditor BF Borgers did not comply with common accounting standards, The Securities and Exchange Commission said.

  • Shares of the media company fell as much as 9% on Friday morning.

Shares of Trump Media fell again on Friday after the Securities and Exchange Commission indicted the company’s auditor for “massive fraud” that went on for more than two years, according to a new report. Deposit.

BF Borgers CPA PC, which audited Trump Media’s financial statements, faced “deliberate and systematic failures to comply” with the company’s general accounting standards, the regulator said.

The company and its owner, Benjamin Borgers, were accused of “falsely representing to their clients” that audits would comply with Common Accounting Standards, and of fabricating audit documents. The actions affected about 1,500 SEC orders from January 2021 through mid-2023, the SEC said. The order did not name any specific clients.

BF Borgers settled the SEC charges by paying a $12 million fine, while owner Borgers paid a separate $2 million fine. The company’s operations were permanently shut down, with Borgers also agreeing to cease “appearing and practicing” as an accountant.

“Ben Borgers and his audit firm, BF Borgers, were responsible for one of the largest wholesale failures by gatekeepers in our financial markets,” Gurbir Grewal, director of the SEC’s Enforcement Division, said in a statement. “Because investors rely on the audited financial statements of public companies when making their investment decisions, accountants and accounting firms that review those statements play a critical role in our financial markets. Borgers and his company have completely abandoned this role, but thanks to painstaking efforts, the work of the employees of the… Securities and Exchange Commission, Borgers and his perpetually affiliated bogus audit mill.”

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Trump Media shares fell as much as 9% on Friday morning, but later pared their losses to about 4%. The company is now looking for a new auditor, she told Business Insider in an email.

“Trump Media looks forward to working with our audit partners in accordance with today’s SEC order,” a TMTG spokesperson said.

BF Borgers did not immediately respond to a request for comment from BI.

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