Trump Media New Auditor Pick Catapults Obscure Arizona Firm (2)

Semple, Marchal & Cooper LLP, a small Phoenix-based accounting firm, just landed a client that’s bigger by far than all its other audit clients combined: Trump Media & Technology Group Corp.

Trump Media picked the firm after US regulators on Friday shut down its previous auditor, calling that firm a “sham audit mill.” The former president’s much-watched social media startup has a market capitalization of $6.7 billion as of Monday. Semple, Marchal & Cooper has two other Nasdaq-listed companies on its roster, according to data from the US audit regulator.

The firm’s largest client was Quest Resource Holding Corp., a Texas-based waste management company, with a market capitalization of $214 million—more than 30 times smaller than the former president’s social media firm.

Its next largest client, a cyber security software firm based in Scottsdale, Ariz., has a market capitalization of $13 million, according to Bloomberg.

Partners at Semple, Marchal & Cooper, which describes itself as “not your average bean counters” on its LinkedIn page, did not respond to requests for comment. Trump Media also didn’t respond to a request for comment.

The auditor’s website highlights membership with the BDO Alliance—an affiliation with the sixth largest US CPA firm that gives Semple, Marchal & Cooper with its roughly 30-person staff access to BDO software, training, and staff resources meant to help smaller firms serve their own clients. BDO USA P.C. said that alliance participants are “responsible for their own professional decision-making.”

Trump Media had used BF Borgers CPA to vet its books since 2022 but was forced to seek a new auditor after the Securities and Exchange Commission permanently suspended the firm. Hundreds of the firm’s other former clients, most of which trade over the counter, are in the same situation.

Filing Frenzy Anticipated

Four other companies have also announced since Friday that they dismissed BF Borgers, marking what is likely the start of a flood of SEC filings related to the departure of one of the most prolific US audit firms from the market.

BF Borgers signed off on the books of 173 audit clients last year, according to research firm Ideagen Audit Analytics. The vast majority of those were traded over-the-counter, meaning they are too small or don’t meet the requirements to trade on a larger exchange. Less than two dozen were listed on Nasdaq and just three traded on the New York Stock Exchange.

The SEC is offering little slack to companies caught in the fray. They are still required to meet annual or quarterly reporting deadlines and to alert the market if they need more time to file their financial reports plus any change in their auditor, according to staff guidance.

The SEC described widespread problems at BF Borgers and sanctioned the firm plus its founder with a total of $14 million in fines to settle the charges. The Wall Street regulator detailed accusations of false work papers, meetings about client risks that never happened, and audits copied from previous years as the Lakewood, Colo.-based firm churned out audit after audit.

The sanctions covered BF Borgers’ work for public companies from January 2021 through June 2023. Trump Media became a publicly traded company in March 2024.

The US audit regulator inspects the work of the Arizona firm every three years, like others its size; BF Borgers faced annual reviews because of its large portfolio. The Public Company Accounting Oversight Board last inspected Semple in 2021 and found flaws in one of the three audits reviewed.

In recent years, the firm audited a peer-to-peer recreational vehicle rental company that abandoned plans to go public and a lab-grown diamond business that faces delisting from Nasdaq because it missed securities filing deadlines and failed to maintain a stock price of at least $1. Semple quit auditing the diamond company, Adamas One Corp., in October.