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Trump Media’s Accounting Firm Committed Massive Fraud in SEC filings [1]

['This Content Is Not Subject To Review Daily Kos Staff Prior To Publication.']

Date: 2024-05-03  

I see news outlets are leading with “accused”, but since Borgers has settled with the SEC under these terms, I think it is now beyond the realm of “alleged”:

To settle the SEC’s charges, BF Borgers agreed to pay a $12 million civil penalty, and Benjamin Borgers agreed to pay a $2 million civil penalty. Both Respondents also agreed to permanent suspensions from appearing and practicing before the Commission as accountants, effective immediately.

The headline from the SEC’s press release lays out the extent of the fraud: SEC Charges Audit Firm BF Borgers and Its Owner with Massive Fraud Affecting More Than 1,500 SEC Filings.

It is still not known if Borgers cooked the books for Trump Media filings, but here are some other gems from the press release (highlights mine):

The SEC’s order finds that, among other things, the Respondents failed to adequately supervise and review the work of the team performing the audits and reviews; did not properly prepare and maintain audit documentation, known as “workpapers;” and failed to obtain engagement quality reviews, without which an audit firm may not issue an audit report. According to the SEC’s order, of 369 BF Borgers clients whose public filings from January 2021 through June 2023 incorporated BF Borgers’s audits and reviews, at least 75 percent of the filings incorporated BF Borgers’s audits and reviews that did not comply with PCAOB standards. The SEC’s order further finds that, at Benjamin Borgers’s direction, BF Borgers staff copied workpapers from previous engagements for their clients, changing only the relevant dates, and then passed them off as workpapers for the current audit period. As a result, the order finds, BF Borgers’s workpapers falsely documented work that had not been performed. Among other things, the workpapers regularly documented purported planning meetings – required to discuss a client’s business and consider any potential risk areas – that never occurred and falsely represented that both Benjamin Borgers, as the partner in charge of the engagement, and an engagement quality reviewer had reviewed and approved the work.

If this company was fabricating paperwork for at least 75% of their clients, what are the chances TMTG was in the other 25%?

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[1] Url: https://www.dailykos.com/stories/2024/5/3/2238752/-Trump-Media-s-Accounting-Firm-Committed-Massive-Fraud-in-SEC-filings?pm_campaign=front_page&pm_source=more_community&pm_medium=web

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