Bloomberg Tax
June 21, 2024, 8:45 AM UTC

Trump Media Auditor’s Shutdown Strands Nearly 40% of Ex-Clients

Nicola M. White
Nicola M. White

Donald Trump’s social media company secured a new auditor within days of the SEC shuttering the firm that had vetted its books. Nearly 40% of BF Borgers CPA PC’s other clients haven’t been so lucky.

Scores of the approximately 180 companies audited by the Colorado firm the Securities and Exchange Commission called a massive fraud and “sham audit mill” in early May have yet to announce they’ve hired new auditors, a Bloomberg Tax analysis found.

While there’s no set deadline to secure a new auditor, going without one for too long is considered a financial reporting red flag. Failure to issue audited financial statements hinders a company’s ability to raise cash and stay listed on public exchanges.

The approximately 70 former BF Borgers clients that remain in auditor search mode range from Nasdaq-listed Japanese luxury real estate developer Lead Real Estate Co. to aspiring hoverboard seller MoveIX Inc., traded on the pink sheets, according to a Bloomberg Tax review of securities filings.

Costs are an obstacle for some of the smaller former Borgers clients. Others have faced pushback from potential new auditors leery about starting financial checks from scratch, ex-Borgers clients told Bloomberg Tax.

“Going forward will be difficult due to the cloud created with this Borgers situation,” said Stephen Smoot, CEO at TorTEC Group Corp., a mineral processing company traded over the counter that currently has no operations or assets but has an acquisition in the works. “Our future as a public company is uncertain.”

More Costs, More Scrutiny

Based in suburban Denver, Borgers was a small shop with a long client roster. It churned out hundreds of copy-and-paste audits, fabricated work papers, and flouted audit rules as it built up a booming practice, according to the SEC. The regulator slapped the firm and its founder with a total of $14 million in fines and permanently barred it from practicing and appearing as accountants before the agency.

Borgers had so many clients it ranked No. 8 on a list of audit firms with the most publicly traded companies. It had just nine fewer clients than mid-tier firm BDO USA.

The majority of the companies on Borgers’ roster—more than 80%—traded over the counter, meaning they didn’t meet the listing standards of big exchanges like Nasdaq or the New York Stock Exchange, according to research firm Ideagen Audit Analytics.

All but three of Borgers’ Nasdaq- and New York Stock Exchange-listed customers hired new auditors soon after the SEC sanctions, securities filings show.

Smaller Company Woes

For smaller OTC companies jolted by the Borgers implosion, expense is a big barrier to finding their next auditor. One CEO of a company that trades over the counter is still looking for an auditor after interviewing 10 potential candidates, all of which quoted fees two to three times more than what Borgers charged.

The Borgers shutdown was “devastating to us and also we had no hint that they were being investigated for so long,” the CEO said, asking for anonymity because of the potential impact on the company’s stock price.

Some audit firms are wary of taking on clients associated with a firm accused of fraud, even though the SEC only sanctioned the firm and its founder, Benjamin Borgers, and not any of its clients.

Regulators will closely scrutinize firms that accept former Borgers customers, said Jackson Johnson, president of Johnson Global Consultancy and former staff member at the Public Company Accounting Oversight Board, the US audit regulator.

“Regulators will be looking at these audits under a microscope,” Johnson said. “The next place they find a home needs to be an auditor that does more work.”

Overseas Opportunity

It hasn’t been tough for all of Borgers’ former clients to find a replacement.

Duke Pitts, the CEO of Healthy Extract Inc., a plant-based supplements company that plans to list on a major exchange, said he started calling new auditors the same day the SEC’s enforcement news broke. He interviewed five firms before landing on Bush & Associates CPA PLC, a Nevada-based firm 11 other former Borgers clients have hired, according to securities filings.

Some of the firms he interviewed fretted about the workload associated with going over books that essentially hadn’t been scrutinized. Pitts said he welcomed the vetting.

“They had concerns that they were going to really have to go through with a fine-tooth comb—which we expect them to,” Pitts said. “That’s where we felt we had an advantage over a lot of the companies. We kept things as straight and narrow as possible.”

Pitts’ company got cold calls from overseas auditors pitching their services. He chose a US-based firm because of its proximity to his company’s warehouse; inventory checks are much easier with an audit shop in the same time zone, he said.

Some former Borgers customers have selected overseas auditors. Thirteen have hired one of two audit firms based in Nigeria, securities filings show. Neither of the firms—Olayinka Oyebola & Co. and Boladale Lawal & Co.—returned calls for comment.

Bowmo Inc., an artificial intelligence-focused software startup that trades over the counter, picked Lagos-based Olayinka & Oyebola. The reason: cost.

“I considered it a big win because we found a much cheaper auditor—like four and a half times cheaper,” Bowmo CEO Michael Lakshin said.

To contact the reporter on this story: Nicola M. White in Washington at

To contact the editors responsible for this story: Amelia Gruber Cohn at; Sei Chong at

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