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 enforcement investigation uncovered that the firm was not actually conducting audits. Instead, they were simply copying old work onto new documents and forging dates. It is important to note that the investigation did not include any work that was done for the Trump Media and Technology Group, which is associated with the Republican presidential candidate.
The SEC’s investigation revealed that BF Borgers, an accounting firm based in Lakewood, Colorado, and its owner Benjamin F. Borgers, failed to conduct proper audits and monitor the financial filings of public companies. This led to a significant and intentional failure within the firm’s accounting practices. During the investigation, it was discovered that Borgers instructed audit staff to copy previous workpapers from past audits and use them as final audit workpapers for new client engagements. Although the staff updated the balance sheet dates and completion dates, all other information was simply replicated from a previous audit or quarterly review. Furthermore, Borgers falsely documented non-existent work by claiming to have met with engagement partners to discuss potential risks associated with an audit.
According to Gurbir S. Grewal, Director of the SEC’s Division of Enforcement, Ben Borgers and his audit firm, BF Borgers, have been held accountable for a significant failure as gatekeepers in the financial markets. Grewal emphasizes the crucial role that accountants and accounting firms play in our financial markets, as investors heavily rely on audited financial statements when making investment decisions. However, Borgers and his firm neglected their responsibilities, which led to the SEC taking action to permanently close down his sham audit mill.
The regulators have stated that Borgers, in their role as the engagement partner, was responsible for reviewing and overseeing the audit work. However, it was found that no planning meetings were conducted and Borgers had minimal interaction with the staff-level auditors. The SEC has accused Borgers of falsifying workpapers in an attempt to deceive and give the appearance of compliance with public accounting standards, even though they were aware that the audit reports were fraudulent.
Trump Media, in response to the SEC’s ban, terminated Borgers and recruited Semple, Marchal & Cooper, LLP, an accounting firm based in Phoenix, Arizona. As stated in a 2018 PCAOB report, this firm operates from a single office and serves three issuer audit clients. With six partners and 13 professional staff members, Semple, Marchal & Cooper, LLP became the new accounting firm for Trump Media, a company valued at $6.7 billion.
