The SEC accuses audit firm BF Borgers of massive fraud that affected over 1,500 SEC filings

The Securities and Exchange Commission (SEC) has accused audit firm BF Borgers CPA PC and its owner, Benjamin F. Borgers, of serious and systematic failures to adhere to Public Company Accounting Oversight Board (PCAOB) standards in audits and reviews included in over 1,500 SEC filings from January 2021 to June 2023. The SEC alleges that the respondents misrepresented compliance with PCAOB standards to clients, falsified audit documentation to give the appearance of compliance, and incorrectly stated in audit reports included in over 500 public company SEC filings that audits complied with PCAOB standards.

To settle the charges, BF Borgers agreed to a $12 million civil penalty, and the owner of the firm, Benjamin Borgers, agreed to a $2 million civil penalty. Both also accepted permanent suspensions from practicing before the Commission as accountants.

The SEC’s Division of Enforcement Director, Gurbir S. Grewal, stated that the actions of Borgers and his firm constituted a significant failure in financial market oversight, jeopardising investors and market integrity. The SEC’s investigation found multiple instances where BF Borgers failed to supervise and review audit work adequately, maintain proper audit documentation, and obtain required engagement quality reviews. Additionally, BF Borgers staff were found to have copied previous workpapers for clients, falsifying documentation. The respondents were found to have engaged in improper professional conduct, violating various securities law provisions. As part of the settlement, they neither admitted nor denied the findings but consented to pay civil penalties and cease and desist from further violations.