A financial firm that did business with the Trump company behind the knock-off social media site Truth Social was recently the subject of surprise revelations from the federal Securities and Exchange Commission (SEC), which accused that outside company of an extensive pattern of misconduct.
Besides a raft of financial penalties, as part of the concurrent agreement between the company, its owner, and that federal agency, the alleged offenders conceded to a permanent ban on conducting accounting work that’s before the SEC. Thus, publicly traded companies using it recently became compelled to find somebody new — a list including the ex-president’s media company, whose stock price has been volatile following a long delayed merger with an already publicly traded company that took the newly combined, Trump-branded operation public.
The imploded accounting firm and its owner were accused, per a federal press release, of “deliberate and systemic failures to comply with Public Company Accounting Oversight Board (PCAOB) standards in its audits and reviews incorporated in more than 1,500 SEC filings from January 2021 through June 2023.”
“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,” said the SEC Enforcement Division’s Gurbir S. Grewal.
Among other issues, the company’s materials allegedly “regularly documented purported planning meetings – required to discuss a client’s business and consider any potential risk areas – that never occurred,” said the authorities.
Truth Social, meanwhile, has faced questions about the underlying business stability in light of significant losses and reportedly paltry U.S. usage of the site itself, which recent data suggested was a tiny fraction of the daily active usage in the U.S. of social platforms like X (formerly known as Twitter).
