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Truth Social owner Trump Media hired a new auditor over the weekend after its previous public accounting firm was accused of perpetrating a massive fraud by the U.S. Securities and Exchange Commission, according to a regulatory filing Monday.
Trump Media said it had engaged Semple, Marchal & Cooper LLP on Saturday to replace BF Borgers CPA.
Trump Media fired BF Borgers after the SEC accused that firm of failing to perform actual audits of its clients and other purported work before signing off on more than 1,500 regulatory filings for public companies.
As part of its settlement with the regulator, BF Borgers and its owner Benjamin Borgers agreed to a permanent ban from auditing public companies, and to pay $14 million in fines.
The ban required Trump Media and other public companies that had used BF Borgers to find new auditors.
“The decision to change independent registered public accounting firms was made with the recommendation and approval of the Audit Committee of the Company,” Trump Media said Monday in an 8-K filing announcing its new auditor.
In a subsequent filing Monday, Trump Media said Semple, Marchal & Cooper was selected “after a detailed evaluation process.”
Trump Media in that second filing also said it “anticipates seeking a limited extension of the deadline for its upcoming 10-Q by filing a Form 12b-25 no later than one business day after the original due date for such report.” 10-Qs are quarterly reports.
Former President Donald Trump owns 65% of Trump Media’s stock, which trades under the ticker DJT, his initials.
A spokesperson for Trump Media did not immediately respond Monday when CNBC asked whether the company plans to ask Semple, Marchal & Cooper to review the past work done by BF Borgers to determine whether the firm violated auditing industry standards in Trump Media’s case.
Semple, Marchal & Cooper had no immediate comment about its appointment.
The Phoenix-based firm’s website said the auditor in its four decades of operation has “become a preeminent, and highly respected, certified public accounting firm.”
The SEC called BF Borgers a “sham audit mill” in its civil regulatory action, accusing the Lakewood, Colorado, firm and its owner of “deliberately” and “systematically” failing to conduct audits and quarterly reviews in accordance with public accounting firm standards.
More than 500 public companies’ SEC filings were affected by Borgers’ systemic failure to properly audit its clients, the commission said Friday.
Financial information that Borgers signed off on was incorporated into more than 1,500 SEC filings dating from early 2021 through mid-2023.
Trump Media was not yet publicly traded at the time of the alleged conduct by BF Borgers. But the firm was acting as Trump Media’s auditor during that time.
Trump Media’s stock became publicly traded on March 26 after the company completed a merger with the shell company Digital World Acquisition Corp., which was previously publicly traded.
The SEC also said Friday that reports filed by companies that used BF Borgers “do not necessarily need to be amended solely because” of the commission’s cease-and-desist order.
“However, issuers should consider whether their filings may need to be amended to address any reporting deficiencies arising from the BF Borgers engagement,” the SEC said.
In its SEC filing Monday, Trump Media said, “BF Borgers’ audit reports on the Company’s consolidated financial statements as of and for the fiscal years ended December 31, 2023 and December 31, 2022 did not contain an adverse opinion or a disclaimer of opinion and were not qualified or modified as to audit scope or accounting principles.”
“During the fiscal years ended December 31, 2023 and 2022, and the subsequent interim period through the date of this report, there were no disagreements, as that term is defined in Item 304(a)(1)(iv) of Regulation S-K, between the Company and BF Borgers on any matter of accounting principles or practices, financial statement disclosure, or auditing scope or procedure, which disagreements, if not resolved to BF Borgers’ satisfaction, would have caused BF Borgers to make reference to such disagreements in its audit reports,” Trump Media said in the filing.