Trump Media stock tumbles as the SEC charges its auditor with 'massive fraud'

• Trump Media's stock price dropped on Friday after its auditor was accused of "massive fraud."
• The auditor BF Borgers did not comply with common accounting standards, the SEC said.

Trump Media shares tumbled yet again on Friday after the Securities and Exchange Commission charged the company's auditor for a "massive fraud" scheme that lasted over two years, according to a new filing.

BF Borgers CPA PC, which audited the financials of Trump Media, had "deliberate and systemic failures to comply" with public company accounting standards, the regulatory agency said.

The firm and its owner, Benjamin Borgers, were accused of "falsely representing to their clients" that audits would comply with common accounting standards, and fabricating audit documents. Those actions affected around 1,500 SEC filings from January 2021 through mid-2023, the SEC said. The order did not name any specific clients.

BF Borgers settled the SEC charges by paying a $12 million penalty, while Borgers, the owner, paid a separate $2 million penalty. The company's operations have permanently shuttered, with Borgers also agreeing to stop "appearing and practicing" as an accountant.

"Ben Borgers and his audit firm, BF Borgers, were responsible for one of the largest wholesale failures by gatekeepers in our financial markets," Gurbir Grewal, the director of the SEC's Division of Enforcement, said in a statement. "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. 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."

Trump Media shares dropped as much as 9% on Friday morning, but later pared its losses to around 4%. The company is now looking for a new auditor, it told Business Insider in an email.

"Trump Media looks forward to working with auditing partners in accordance with today's SEC order," a spokesperson for TMTG said.

BF Borgers did not immediately respond to a request for comment from BI.