In a sweeping enforcement action, the U.S. Securities and Exchange Commission (SEC) has brought forth charges against BF Borgers CPA PC and its owner, Benjamin F. Borgers, in connection with extensive audit failures spanning a significant period. The SEC’s allegations paint a damning picture of what it describes as a “sham audit mill,” with accusations of falsified documents, fictitious records, and non-existent audit practices affecting a vast number of SEC filings.
The SEC’s investigation revealed a pattern of misconduct at BF Borgers, impacting over 1,500 SEC filings from January 2021 to June 2023, including audits conducted for high-profile clients such as Trump Media. At the heart of the charges are allegations that BF Borgers systematically misrepresented the compliance of its audits with the standards set by the Public Company Accounting Oversight Board (PCAOB).
According to the SEC’s findings, BF Borgers allegedly fabricated audit documentation to create an illusion of compliance with PCAOB regulations. This deceptive practice extended to over 500 public company filings, with false assertions made in audit reports regarding the adherence to auditing standards. The SEC’s order highlights the firm’s purported creation of false meeting records and the generation of fictitious workpapers to maintain the appearance of regulatory compliance.
In response to the SEC’s allegations, BF Borgers has opted for a settlement, agreeing to pay a substantial civil penalty of $12 million, while Benjamin Borgers will individually pay a fine of $2 million. Additionally, both parties have consented to permanent suspensions from practicing as accountants before the Commission.
The SEC’s investigation uncovered systemic failures within BF Borgers, including inadequate supervision and review processes. The firm allegedly engaged in the reuse of outdated workpapers without proper updates, a practice deemed inconsistent with required auditing standards. Moreover, the SEC’s order highlighted the fabrication of planning meetings and approvals, which were falsely documented without any actual occurrence.
The SEC’s order concludes that BF Borgers and Benjamin Borgers engaged in improper professional conduct, violating various federal securities laws related to anti-fraud measures and recordkeeping obligations. As part of the settlement, BF Borgers and Benjamin Borgers have agreed to cease and desist from future violations and to pay substantial penalties, without admitting or denying the SEC’s findings.