The firm BF Borgers CPA PC and owner Benjamin F. Borgers were charged by the agency with “deliberate and systemic failures to comply with Public Company Accounting Oversight Board (PCAOB) standards in its audits and reviews incorporated in more than 1,500 SEC filings from January 2021 through June 2023.”
The SEC in a statement on Friday morning said the respondents were also being charged with “falsely representing to their clients that the firm’s work would comply with PCAOB standards; fabricating audit documentation to make it appear that the firm’s work did comply with PCAOB standards; and falsely stating in audit reports included in more than 500 public company SEC filings that the firm’s audits complied with PCAOB standards.”
The firm agreed to settle the charges with a $12 million civil penalty while Mr. Borgers agreed to pay a $2 million civil penalty, according to the SEC, though the agency said the acceptance of a consent order did not amount to “admitting or denying” each of the findings.
“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.
Failure to Supervise
The SEC found that the respondents failed to supervise and review the work of those involved with performing audits and reviews. The SEC also found that the respondents did not properly prepare and maintain audit information known as “workpapers” and other necessary documents that allow auditing firms to issue audit reports.
“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.”
It is unclear which clients BF Borgers represented, but Reuters reported it has represented Trump Media since 2022 and was still its auditor as of last month, according to their filings.
A spokesperson for former President Donald Trump’s media company wrote responded to the outlet saying “Trump Media looks forward to working with new auditing partners in accordance with today’s SEC order.”
According to the SEC, Mr. Borger directed staff to copy workpapers from previous clients, changing only the dates, and passed them off as current. The SEC said this amounts to the workpapers falsely documenting work that was not actually completed.
Planning meetings were also documented as taking place when they did not actually happen, the SEC found, which are required to appropriately assess “risk areas,” further falsely claiming Mr. Borgers had reviewed and approved the work.
The laws violated, the SEC found, were related to anti-fraud, recordkeeping and other provisions of federal securities laws.
“Without admitting or denying the SEC’s findings as to each of them, BF Borgers and Benjamin Borgers both consented to an order, effective immediately, pursuant to which they are ordered to pay civil penalties and are denied the privilege of appearing or practicing before the Commission as an accountant, as discussed above,” the agency press release added. “In addition, they are censured and must cease and desist from committing or causing violations of the relevant provisions of the federal securities laws.”
BF Borgers did not respond to a request for comment by press time.
