The accounting firm that Trump hired for his media firm’s IPO was caught copy-and-pasting previous audits and is now banned forever
Financial regulators permanently banned the accounting firm that the parent company of Donald Trump’s media platform hired in an enforcement action after an investigation revealed that the firm wasn’t really conducting audits and instead just pasted old work into new papers and forged the date. The investigation results did not include work performed for the Republican presidential candidate’s Trump Media and Technology Group.
According to the SEC’s probe, the Lakewood, Colorado accounting firm BF Borgers and its namesake owner Benjamin F. Borgers failed to properly audit and monitor public companies’ financial filings, resulting in a widespread “deliberate and systematic failure” of the public accounting firm. Regulators uncovered that Borgers himself told audit staff they could copy previous workpapers from past audits and paste them in as final audit workpapers for new client engagements. The SEC said the staff, in response, updated the balance sheet dates and dates of completion of the work papers but all the other information was replicated from a previous audit or quarterly review. Borgers also falsely documented nonexistent work by claiming to be meeting with engagement partners for meetings to discuss potential risks from an audit.
“Ben Borgers and his audit firm, BF Borgers, were responsible for one of the largest wholesale failures by gatekeepers in our financial markets,” said Gurbir S. Grewal, Director of the SEC’s Division of Enforcement. “Because investors rely on the audited financial statements of public companies when making their investment decisions, the accountants and accounting firms that audit those statements play a critical role in our financial markets. Borgers and his firm completely abandoned that role, but thanks to the painstaking work of the SEC staff, Borgers and his sham audit mill have been permanently shut down.”
Regulators said Borgers, as engagement partner, was supposed to review or supervise audit work. Instead, there were zero planning meetings held and “Borgers rarely interacted with the staff level auditors.” The SEC said Borgers’ falsified workpapers were meant to “create the illusion” that the firm’s audit engagements complied with public accounting standards, whereas they knew the reports were fraudulent.
In response to the SEC’s ban, Trump Media fired Borgers and hired Semple, Marchal & Cooper, LLP a Phoenix, Ariz.-based accounting firm. According to a 2018 PCAOB report, the firm had a single office with three issuer audit clients, six partners and 13 professional staff members. Trump Media has a market cap of $6.7 billion.
