Sometimes, the forces of attraction are just too strong to resist — the heart wants what it wants. This sentiment is at work not just in love affairs, but in all kinds of relationships, even oddball corporate partnerships. Take, for instance, the pairing of Trump Media & Technology Group, the former President’s corporate parent for his Twitter clone, and BF Borgers, its auditor since 2022. On the surface, they don’t appear to have much in common. Trump’s company is a $6 billion publicly traded entity, while Borgers is an unknown auditor run by an obscure number cruncher. They aren’t even located anywhere near each other with Trump Media in Florida and Borgers headquartered in Colorado. But on Friday, federal regulators charged Trump Media’s auditor with “massive fraud” and shut down the company, and all of a sudden the pairing started to make a little more sense.
Auditors are supposed to be the people who look over all of a company’s financial statements and make sure they are both accurate and non-fraudulent. It is, statistically speaking, not a job for everyone, since the work is incredibly detail-oriented. But the forder, filed by the Securities and Exchange Commission on Friday, accuses the company of basically doing the exact opposite of what it was supposed to. According to the 15-page document, BF Borgers, as well as its CEO, Benjamin Borgers, oversaw a “deliberate and systematic failure to audit and review public company and SEC-registered broker-dealer clients’ financial statements.” Its auditors copied old financial documents to save time (this is bad) and “review important workpapers” (also bad) and made false records of meetings that never occurred (very bad!). They also auto-deleted their emails, tried to circumvent the auditing industry’s watchdog agency, and weren’t able to provide any proof of much of their work.
Of course, Trump — the man, as well as his broader real-estate organization — was found liable for fraud in New York in February for fabricating financial documents that were used to get loans. (He’s appealing the ruling, a process that hasn’t been going great.) It’s worth pointing out that Trump Media is not being accused of any kind of fraud here. While the SEC’s settlement says that BF Borgers fabricated more than 1,500 filings from 2021 to last June, the court documents don’t actually mention Trump Media, and it’s unclear if any of the former president’s filings were affected. However, it’s statistically likely that Trump Media is among that batch, since the SEC estimated that “at least 75 percent” of its customers’ public filings and disclosures were botched. So far, this isn’t quite on the level of the mess created by former auditing giant Arthur Anderson — the company that helped Enron and WorldCom cover up their massive frauds — but 1,500 is a large number of filings, and many of those companies will likely have to publicly disclose new, correct financial figures in the coming months.
BF Borgers didn’t bother to get back to me. The company didn’t admit any wrongdoing, but it is paying a $12 million fine — the CEO is paying an additional $2 million — and shutting down. (Borgers has also been banned from auditing.) As for Trump Media, it looks like the company’s brief relationship with BF Borgers is over. “Trump Media looks forward to working with new auditing partners in accordance with today’s SEC order,” a spokeswoman for Trump media said. (She didn’t respond to a question about whether the company would have to restate its filings.) The company’s stock dropped by about 4 percent, which is fairly small for a meme stock. But then again, maybe seeing “massive fraud” in a headline with Trump Media isn’t so shocking.
