The audit firm used by Donald Trump’s social media company has been shut down by US regulators after being accused of running a “sham audit mill”.
The Securities and Exchange Commission (SEC) charged BF Borgers and its owner Benjamin Borgers with what it called a “massive fraud”.
It said that of the more than 1,500 public company filings from 369 clients that featured work by the audit firm, three-quarters did not comply with accounting standards.
Shares in Trump Media & Technology Group (TMTG), which owns the Truth Social app, fell by as much as 9pc on the news before recovering much of the losses.
TMTG appointed BF Borgers in 2022, reportedly after its previous auditor Withum Smith and Brown had resigned. The firm had grown rapidly, signing up hundreds of clients despite having a small team of accountants.
The SEC did not say which companies’ audits had been found lacking, but said the firm had “failed to adequately supervise” audits and did not maintain proper records.
It said that in some cases, staff had copied documents from previous audits and simply changed the dates before filing them, and that work had been signed off as having been reviewed when it had not been.
BF Borgers and Mr Borgers have agreed to pay $14m (£11m) between them in fines and have been barred from practising as accountants on SEC filings.
“Thanks to the painstaking work of the SEC staff, Borgers and his sham audit mill have been permanently shut down,” the SEC’s enforcement head Gurbir Grewal said.
A TMTG spokesman said: “Trump Media looks forward to working with new auditing partners in accordance with today’s SEC order.”
Truth Social, a social network similar to Twitter that the Republican presidential candidate frequently uses to post public messages, has had an eventful few weeks as a public company since going public on the US Nasdaq in March.
Mr Trump’s stake was valued at $5.5bn when TMTG went public and shares have fluctuated dramatically since, with the company hitting out at short-sellers seeking to profit from a falling share price.
