Trump Media stock plunges after SEC auditing bombshell

investmentnews.com:

Shares of Trump Media tumbled on Friday following news that the SEC charged the company’s auditing firm, BF Borgers CPA, for “massive fraud” and systemic non-compliance with critical auditing standards.

According to a statement from the SEC, these actions compromised over 1,500 filings with the agency from January 2021 through June 2023.

The SEC’s investigation revealed that BF Borgers CPA, under the leadership of owner Benjamin Borgers, engaged in repeated failures to adhere to the Public Company Accounting Oversight Board’s standards. This misconduct included fabricating audit documentation and falsely asserting that their audits met the required standards in more than 500 public company filings.

“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,” said Gurbir S. Grewal, director of the SEC’s division of enforcement.

To resolve the charges, BF Borgers and Benjamin Borgers have agreed to pay civil penalties of $12 million and $2 million respectively. Moreover, both have accepted permanent suspensions from appearing and practicing before the SEC as accountants.

While the SEC’s statement didn’t name the company specifically, Trump Media’s stock fell 5.2% to $46.15 after the news Friday morning, reflecting the market’s reaction to the potential risks posed by the auditing discrepancies and pattern of fraud uncovered by the SEC.

In response to the fallout, Trump Media issued a statement, indicating its intent to move forward with new audit partners in line with the SEC’s directives. “Trump Media looks