Trump’s Precarious Truth Social Gambit Just Took a Turn for the Worse

The auditing firm for Donald Trump’s social media company Truth Social doesn’t look so clean.

On Friday, the Securities and Exchange Commission charged auditor BF Borgers CPA for “massive fraud” that affected more than 1,500 SEC filings. The firm is accused of “deliberate and systemic failures to comply” with federal standards between January 2021 and June 2023, according to an announcement by the SEC.

The accounting group and its owner, Benjamin Borgers, have agreed to pay $14 million in civil penalties and are permanently suspended from practicing as accountants.

“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, in a statement. “As a result of their fraudulent conduct, they not only put investors and markets at risk by causing public companies to incorporate noncompliant audits and reviews into more than 1,500 filings with the Commission, but also undermined trust and confidence in our markets.”

“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,” Grewal continued. “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.”

The SEC order also accuses Borgers of failing to supervise the teams performing the audits and reviews, improperly preparing and maintaining documentation of the audits, and failing to get engagement quality reviews, which the agency notes are a necessary part of issuing an audit report.

The share price of Trump Media & Technology Group, the corporation that owns Truth Social, was down 9 percent after trading began.

The news is the latest blow to the GOP presidential nominee’s floundering social media venture, which went public in late March. Truth Social’s original valuation of $8 billion was expected to buoy Trump’s wallet through more than half a billion dollars in court judgments and legal fees, but the company’s value quickly plummeted after reports emerged that the stock was concocted as a pump-and-dump scheme. Just a few days after hitting the trading floor, Truth Social stock took another hit when two of its major investors were charged with insider trading.

This story has been updated.