BF Borgers Fined in Ontario For Unlicensed Auditing

BF Borgers, the Lakewood, CO-based audit firm that was dismissed as the auditor of Donald Trump’s Trump Media & Technology Group after receiving a permanent ban from the Securities and Exchange Commission (SEC) last May, was prosecuted by CPA Ontario and fined by a court for not following the province’s licensing and registration requirements for public accounting firms.

CPA Ontario is the regulatory body responsible for the licensing and oversight of Chartered Professional Accountants and accounting firms in Ontario.

According to an Aug. 26 media release, BF Borgers and managing partner Benjamin Borgers pleaded guilty to engaging in public accounting work in Ontario, including performing the audit of a reporting issuer, without registering with CPA Ontario or holding a public accounting license in Ontario.

The firm committed offenses under the Chartered Professional Accountants of Ontario Act (2017) and the Public Accounting Act (2004).

“We continue to take action against accounting firms and CPAs who fail to comply with our requirements to practice in the province, in accordance with our mandate to protect the public and uphold the high standards of the CPA profession,” Janet Gillies, CPA, CA, executive vice-president of regulatory and standards at CPA Ontario, said in a statement. “Unregistered and unlicensed firms and CPAs operating in Ontario bypass essential regulatory oversight, undermining public protection and confidence in public accounting.”

The order of the Ontario Court of Justice requires BF Borgers and Benjamin Borgers to pay total fines of $50,000 to the government of Ontario and $15,000 to CPA Ontario for costs incurred during the investigation and prosecution. The order also places the audit firm and Borgers on probation for two years. BF Borgers and Benjamin Borgers continue to be unauthorized and unlicensed to practice public accounting in the province, CPA Ontario said.

The SEC on May 3 permanently barred BF Borgers from serving as accountants over charges of “massive fraud.”

The SEC charged the firm with failure to comply with Public Company Accounting Oversight Board (PCAOB) standards in audits and reviews of more than 1,500 SEC filings between January 2021 and June 2023. Gurbir Grewal, director of the SEC’s Division of Enforcement, called BF Borgers a “sham audit mill.”

BF Borgers agreed to pay a $12 million civil penalty to settle the charges, while Benjamin Borgers agreed to pay a $2 million civil penalty. Both agreed to permanent suspensions from serving as accountants before the SEC. They didn’t admit to or deny the SEC’s findings.

The firm and Borgers were also charged with falsely representing their work to clients as compliant with PCAOB standards, fabricating audit documentation to make it look PCAOB compliant, and falsely stating in audit reports included in more than 500 public company SEC filings that its audits complied with the standards.

Trump Media said in an SEC filing later that day that it replaced BF Borgers as its outside auditor with the Phoenix, AZ-based firm Semple, Marchal & Cooper. Trump Media said the decision to change independent registered public accounting firms was made with the recommendation and approval of its audit committee.

Bloomberg Tax reported last week that Colorado accounting regulators recently voted to refer BF Borgers and Benjamin Borgers to the state’s attorney general for CPA revocation. Borgers may also voluntarily surrender his license.

If Borgers does not relinquish his CPA, the Colorado attorney general will file a notice of charges against him and he would face a hearing in front of an administrative law judge, a spokesperson for the state’s Department of Regulatory Agencies told Bloomberg Tax.

The Colorado Board of Accountancy fined Borgers $5,000 last March for flawed retirement plan audits.

With Tribune News Wire Services