Trump Media & Technology Group has dismissed its accounting firm, BF Borgers, and engaged a new auditor, Semple, Marchal & Cooper LLP, after the SEC charged BF Borgers with conducting what it described as "sham audits," alleging the firm failed to conduct legitimate reviews and signed off on more than 1,500 regulatory filings improperly.
BF Borgers, which had been instrumental in auditing Trump Media before and after it went public in March through a merger with Digital World Acquisition Corp., faced accusations of not performing actual audits for its clients, which led to a mandated permanent ban from auditing public companies. This shift forced Trump Media and other public companies to seek new auditors promptly.
On the heels of the SEC's charges, Trump Media acted swiftly, terminating its relationship with BF Borgers as the firm's alleged fraudulent activities came to light. Within a day of the dismissal, Trump Media secured Semple, Marchal & Cooper as its new auditing firm. The quick response aimed to stabilize the company's financial oversight after the SEC's findings disrupted more than 500 public companies connected to BF Borgers.
The SEC's investigation did not implicate Trump Media in the wrongdoing but focused on the auditing practices of BF Borgers during a period when it handled many public company accounts. The commission highlighted systematic failures by BF Borgers to adhere to auditing standards, which impacted numerous SEC filings between early 2021 and mid-2023.
Following the switch, Trump Media announced that its new auditor comes with a strong reputation and a history of over four decades of certified public accounting practice. This move aligns with Trump Media's strategy to ensure robust and compliant financial reporting amidst the fallout from the BF Borgers scandal.
The financial repercussions for BF Borgers were severe, with the firm and its owner agreeing to pay a combined $14 million in penalties to settle the charges. This case underscores the critical importance of diligent and accurate financial auditing, especially for public companies whose investors rely on the integrity of financial reports.
Trump Media, now trading under the ticker symbol DJT after its March public listing, stated in its SEC filing that prior audits by BF Borgers for fiscal years 2022 and 2023 did not reveal any adverse opinions. Moreover, there were no reported disagreements over accounting practices or auditing procedures during those periods.
