Trump Media & Technology Group, the owner of the recently IPO'd Truth Social and other planned media entities, has hired Semple, Marchal & Cooper as its new auditing firm after recently firing accounting firm BF Borgers, whom regulators accuse of "massive fraud."
The new Phoenix, Arizona-based firm has six partners and 13 professional staff members, according to a 2018 PCAOB report. The company's LinkedIn page has 27 accounts associated with individuals who say they work at the firm.
The firing of BF Borgers, which occurred on the same day the SEC brought charges, is part of a collection of increased efforts by regulators to enforce sound accounting standards. This firing was ordered by the SEC to all clients of BF Borgers.
Trump Media is accused of no wrongdoing by regulators. The filing also indicates the work done by BF Borgers — audit reports for the company's financial statements in 2022 and 2023 — had no issues. “[The reports] did not contain an adverse opinion or a disclaimer of opinion and were not qualified or modified as to audit scope or accounting principles,” the filing says.
However, the work done by BF Borgers was done before the Truth Social’s March 26 IPO, so the statements from those years are private. BF Borgers worked as an independently registered firm for Trump Media before its March offering. Afterward, Trump Media hired BF Borgers as the accounting firm of the now publicly traded company.
BF Borgers, a firm the SEC directors now refer to as a "sham audit mill," has been under scrutiny by Canadian regulators since last month. The firm was also terminated from the AICPA's Peer Review program for levels of deficiency that could not be corrected.
According to the SEC's order, Benjamin F. Borgers, the company's principal and owner, told his audit teams they were allowed to copy and paste previous workpapers from past audits into final audit reports for new clients.
This, according to the SEC, resulted in audit teams updating balance sheet dates and completion dates with information that was taken from an older audit or review. Borgers is also accused of falsely documenting bogus work by scheduling fake meetings that were made to look like the firm was discussing audit risks with engagement partners.
The SEC also accused the firm's owner of being largely absent from auditing operations. "Borgers rarely interacted with the staff-level auditors,” the report states.
"As the engagement partner, Borgers also failed both to review the work of the engagement team and to ensure that the workpapers properly and accurately documented the work performed on the audits," the report continues. "Specifically, Borgers failed to review important workpapers for many audits, including workpapers relating to his purported supervision and review of the engagement team's work and conclusions."