Financial regulators have permanently banned the accounting firm that was hired by the parent company of Donald Trump’s media platform. This action was taken after an investigation uncovered that the firm was not actually conducting audits. Instead, they were simply copying old work and forging dates on new documents. It is important to note that the investigation did not include any work that was done for the Republican presidential candidate’s Trump Media and Technology Group.
According to the SEC’s investigation, the Lakewood, Colorado, accounting company BF Borgers and its eponymous owner, Benjamin F. Borgers, failed to properly audit and monitor public firms’ financial reports, resulting in a widespread “deliberate and systematic failure” of the firm. Regulators discovered that Borgers instructed audit staff to replicate earlier audit workpapers and paste them in as final audit workpapers for new client engagements. The SEC claims that the staff updated the balance sheet dates and completion dates of the work papers in response, but replicated all other material from a previous audit or quarterly review. Borgers also falsely documented nonexistent activity, claiming to be meeting with engagement partners to discuss audit-related concerns.
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“Ben Borgers and his audit firm, BF Borgers, were responsible for one of the largest wholesale failures by gatekeepers in our financial markets,” stated Gurbir S. Grewal, Director of the SEC’s Division of Enforcement. “Because investors rely on audited financial statements from public corporations to make investment decisions, accountants and accounting firms that audit such accounts play an important role in our financial markets.”The SEC staff’s tireless efforts led to the permanent closure of Borgers and his bogus audit mill, despite their complete abandonment of this function.
According to regulators, Borgers’ role as an engagement partner was to monitor or supervise audit work. Instead, there were no planning meetings, and “Borgers rarely interacted with staff-level auditors.” The SEC claimed Borgers’ fabricated workpapers were intended to “create the illusion” that the firm’s audit engagements met public accounting requirements while knowing the reports were phony.
In reaction to the SEC’s order, Trump Media fired Borgers and recruited Semple, Marchal & Cooper, LLP, an accounting company based in Phoenix, Arizona. According to a 2018 PCAOB report, the business has one office, three issuer audit clients, six partners, and 13 professional staff members. Trump Media has a market capitalization of $6.7 billion.
