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Auditing Firm and Owner Charged with Massive Fraud in Trump Media Case

Published: 03 May 2024 at 16:34

Business

The auditing firm BF Borgers CPA and its owner Benjamin Borgers were charged with massive fraud by the SEC for violations related to more than 1,500 SEC filings. They agreed to a permanent suspension from practicing as accountants before the SEC and to pay $14 million in civil penalties. The SEC called BF Borgers a sham audit mill for deliberately failing to comply with PCAOB standards and fabricating audit documents. The case raised concerns about the accuracy of financial information in reports from companies audited by Borgers, including Trump Media, owned by former President Donald Trump.

DEEP DIVE


Shares of Trump Media Soar After Urging House Republicans to Investigate Stock Manipulation


Trump Media's shares rose by over 9% after urging House Republican committee leaders to investigate possible unlawful manipulation of its stock. The company's CEO, Devin Nunes, requested GOP chairs to probe anomalous trading and naked short selling affecting its stock price. Nunes claimed Trump Media was a victim worth over $1.3 billion, and highlighted the need to protect shareholders and hold perpetrators accountable. The letter was addressed to four House committee leaders: Financial Services Chairman Patrick McHenry, Judiciary Chairman Jim Jordan, Ways and Means Chairman Jason Smith, and Oversight Chairman James Comer.

Insider Trading Trial Begins for Financial Executive Linked to Trump Media Deal


A trial has commenced for Bruce Garelick, a financial executive accused of enabling insider trading related to the merger between Digital World Acquisition Corp. and Trump Media & Technology Group. His co-defendants, the Shvartsman brothers, have already pleaded guilty to making over $22 million illegally. While Garelick denies tipping off anyone and made only $49,000 from trades, prosecutors allege he shared confidential information from his position on DWAC's board. The trial involves evidence such as witnesses, trading records, and communications. The indictment does not implicate Donald Trump or his media company.

Trump Media Files Complaint About Potential Market Manipulation Impacting Truth Social Stock


Trump Media, the parent company of Truth Social, has filed a formal complaint with Nasdaq, concerning potential market manipulation affecting its stock DJT. The stock gained 45.3% this week but is down 50% from its peak. CEO Devin Nunes expressed concerns about naked short selling and named four market participants responsible for over 60% of the trading volume. Citadel Securities responded with a scathing statement towards Nunes. After the complaint, the stock briefly rose 12%. Nasdaq and other involved parties have been contacted for comments.

Trump Media suspects illegal activity driving down the price of its shares


Devin Nunes, CEO of Trump Media, alerted Nasdaq of potential illegal naked short selling that may be causing share price decline. Legitimate short sellers borrow shares before selling, unlike those involved in naked short selling. The company, majority-owned by Donald Trump, has seen a 50% decrease from its all-time high, struggling to generate revenue and needing cash. Experts caution investors due to the lack of fundamental support for the company's valuation. Despite losing $58 million in 2023, the company ended a recent session 9.6% higher.

Donald Trump's Stake in Truth Social Increases, Making Him $1.8 Billion Richer


Former President Donald Trump has raised his stake in Trump Media & Technology Group, the company that operates his social media app Truth Social, to nearly 65%, adding 36 million shares to his holdings. The stock value has surged over 50% to $49.93 in the past five sessions, boosting Trump's wealth by $1.8 billion. Trump now controls 114.75 million shares of the company, valued at $5.7 billion, with most of his fortune tied up in DJT shares. However, a lockup period restrains Trump and other executives from selling their shares for five months.

Trump Media & Technology Group (Wikipedia)


Trump Media & Technology Group (TMTG), also known as T Media Tech LLC, is an American media and technology company founded in 2021 by former U.S. president Donald Trump. In October 2021, the company announced a proposed merger agreement with Digital World Acquisition Corp (DWAC), a publicly traded special-purpose acquisition company. Trump owned about 90% of the company in April 2023. Since January 2022, former U.S. representative Devin Nunes has served as the company's chief executive officer. In February 2022, TMTG launched the social network Truth Social. Trump reported in an April 2023 personal financial disclosure that he had made less than $201 from TMTG.A November 2023 DWAC financial disclosure indicated TMTG had generated losses such that management had "substantial doubt" about its ability to pay its bills, and the company's accounting firm had "substantial doubt" about the company's ability to remain in business.

Trump Media & Technology Group Corp's Volatile Stock Performance


Trump Media & Technology Group Corp went public on the Nasdaq exchange amidst lawsuits, short-selling, and speculation. The stock's volatility is linked to Trump Media's main asset: former President Donald Trump, who runs the social media platform Truth Social. Traditional analysts struggle to predict the stock's movements due to its ties to Trump and his strong supporter base. Large investors have been hesitant to buy shares in the company.

Trump's Media Company Seeks Nasdaq Help Against Short Selling


Donald Trump's media and technology company, Trump Media & Technology Group, has requested Nasdaq's assistance to prevent "naked" short-selling in its shares, citing potential market manipulation due to high short interest. The CEO of TMTG highlighted that a few market participants were responsible for over 60% of the trading volume in DJT shares. Citadel Securities responded, emphasizing integrity, while other market makers did not immediately comment. Nasdaq reiterated its commitment to market principles and transparency, advocating against naked short-selling.

Trump Media Shares Surge Amid Campaign Against Short Sellers


Trump Media shares have seen a 50% surge in the past week, with a 5% increase on Tuesday, trading at roughly $50 a share. The rise comes without significant financial improvements, as the company had $58 million in losses and $4.1 million in revenue last year. The surge in stock price is attributed to efforts to target short sellers, urging shareholders to recall shares from short-selling and causing a short-squeeze. Nearly 6 million shares of Trump Media are sold short, leading to concerns about the company's valuation.

Former President Trump set to receive $1.2 billion bonus in the form of additional shares in his social media company


Former President Trump qualifies for a $1.2 billion bonus with 36 million additional shares in Trump Media & Technology Group (TMTG) if the stock remains above a certain value. The bonus boosts the paper value of his stake in the company to about $3.7 billion, providing a financial lifeline amid legal challenges. Despite the stock's decline since its debut, the bonus adds significant value to Trump's holdings in the company where he invested no money and cannot sell until September.

Former President Donald Trump delivers pizza to New York City firefighters during a campaign stop after a day in court


Former President Donald Trump visited FDNYs Engine Co. 8, Ladder Co. 2 in Manhattan, delivering pizzas, chatting with firefighters, and signing items. Despite cheers from firefighters, New York Attorney General Letitia James faced boos at the same firehouse. Trump, on trial for hush money payments to Stormy Daniels, criticized the trial as election interference, campaigning in Wisconsin and Michigan. He believes the trial will boost his campaign, but has been charged with 34 counts of falsifying business records in Manhattan.

Former President Donald Trump is set to receive $1.3 billion in shares from Truth Social as Trump Media & Technology Groups' share price is on the rise, making him the dominant shareholder with a potential stake of 114 million shares.


Former President Donald Trump is on track to receive 36 million shares of Truth Social valued at $1.3 billion, with the potential to gain more shares as Trump Media & Technology Group's stock price rises, solidifying his position as the dominant shareholder.

Delaware Judge Slows Down Lawsuit Against Trump Media & Technology Group


A Delaware judge granted a request to slow down a lawsuit filed by two co-founders of Trump Media & Technology Group, who claimed their stake in the company was being diluted after a merger. The co-founders also faced a lockup provision preventing them from selling shares for six months. The lawsuit also involved an anti-suit injunction against a Florida lawsuit and questions about venue provisions and Delaware law. The judge ruled to slow down the case, emphasizing the need to address whether the Florida lawsuit violated court orders rapidly.

Former President Donald Trump set to receive $1.25 billion earnout bonus from Trump Media as stock price surpasses key threshold


Former President Donald Trump is poised to receive an additional 36 million shares of Trump Media as part of an earnout bonus worth over $1.25 billion, triggered by the stock reaching twice the benchmark minimum share price of $17.50 for the required 20 trading days within a 30-day period starting from March 25. Trump's total stake in Trump Media would be valued at more than $4 billion at $35 per share, with Trump Media having the potential to issue a total of 40 million earnout shares.

The Rollercoaster Ride of Trump Media's Stock: The Unpredictability of Meme Stocks


Trump Media, the company behind Truth Social, experienced fluctuating stock prices without clear reasons, as it operates as a meme stock that can be influenced by various factors like investor sentiment and market dynamics. The company's shares have seen significant rallies and collapses without fundamental explanations, reflecting the volatility and unpredictability of meme stocks in the market.

Trump's Media Company Applies for H-1B Visa Despite His Prior Stance


Trump Media & Technology Group, founded by Donald Trump, applied for an H-1B visa despite Trump's previous restrictions on the program. The company, behind Truth Social, sought the visa for a $65,000 annual salary but did not hire the worker. Jared Kushner's investment firm also filed for and was approved for a visa under the same program. The application was made under prior management, and current management swiftly terminated the process when they found out. The H-1B visa petition can cost companies about $5,000 per employee.

Singapore-based Terraform Labs and Founder Found Liable for Fraud by Manhattan Jury


A jury in Manhattan found Terraform Labs and its founder Do Kwon liable for civil fraud charges brought by the US SEC for misleading investors about the stability of TerraUSD, leading to over $40 billion in investor losses when the stablecoin's peg to the dollar failed in May 2022. The SEC is seeking financial penalties and industry bans, with Judge Jed Rakoff set to consider penalties soon. The collapse of TerraUSD and Luna caused ripple effects in the cryptocurrency market, prompting other companies to file for bankruptcy in 2022.

Donald Trump faces additional sanctions in hush money trial


Former President Donald Trump is back in Manhattan criminal court for Day 10 of his trial, facing the prospect of added fines for violating a gag order by attacking witnesses. Lawyer Keith Davidson, who represented women involved in deals to keep quiet about alleged encounters with Trump, is a key witness. The trial has revealed details of hush money payments made to prevent embarrassing stories from surfacing during the 2016 election, including payments to a porn actor and a former Playboy model. Testimony from key players like Michael Cohen, Trump's former lawyer, is crucial for the prosecution's case.

Donald Trump returns to New York as historic trial continues


Former President Donald Trump returns to New York City as the criminal trial against him resumes in the Manhattan Criminal Courthouse. Trump faces 34 felony counts related to falsifying business records during the 2016 presidential race, specifically regarding a hush money payment to Stormy Daniels. Despite Daniels alleging an affair, Trump denies any wrongdoing and aims for reelection this November. In a recent session, Judge Merchan fined Trump $9,000 for breaching a gag order.

Social media use by Donald Trump (Wikipedia)


Donald Trump's use of social media attracted attention worldwide since he joined Twitter in May 2009. Over nearly twelve years, Trump tweeted around 57,000 times, including about 8,000 times during the 2016 election campaign and over 25,000 times during his presidency. The White House said the tweets should be considered official statements. When Twitter banned Trump from the platform in January 2021 during the final days of his term, his handle @realDonaldTrump had over 88.9 million followers. On November 19, 2022, Twitter's new owner, Elon Musk, reinstated his account, although Trump has stated he will not use it in favor of his own social media platform, Truth Social. The first tweet since 2021 was made in August 2023 about his mugshot from Fulton County Jail, but the account has since remained inactive.For most of Trump's presidency, his account on Twitter, where he often posted controversial and false statements, remained unmoderated in the name of "public interest". Congress performed its own form of moderation: on July 16, 2019, the House of Representatives voted mostly along party lines to censure him for "racist comments" he had tweeted two days previously. In the face of this political censure, his tweets only accelerated. An investigation by The New York Times published November 2, 2019, found that, during his time in office to date, Trump had already retweeted at least 145 accounts that "have pushed conspiracy or fringe content, including more than two dozen that have since been suspended." In 2020, Trump also spread misinformation about the COVID-19 pandemic.During his 2020 reelection campaign, he falsely suggested that postal voting or electoral fraud may compromise the election, prompting Twitter to either remove such tweets or label them as disputed. After his election loss, Trump persistently undermined the election results in the weeks leading to Joe Biden's inauguration. His tweets played a role in inciting the January 6, 2021, attack of the US Capitol during the formal counting of electoral votes. Though the Senate eventually acquitted Trump during his second impeachment, social media companies swiftly banned him. Facebook and Instagram banned him for two years. Twitter permanently suspended his @realDonaldTrump handle, followed by the official account of his campaign (@TeamTrump) and the accounts of allies who posted on his behalf, like Trump campaign digital director Gary Coby. Twitter also deleted three tweets by Trump on the @POTUS handle and barred access to the presidential account until Joe Biden's inauguration. During the first week that Trump was banned on several platforms (January 9–15), election-related misinformation declined 73 percent, according to research analytics firm Zignal Labs.As Trump continued to issue brief statements, his spokesperson Liz Harrington tweeted screenshots of them under the Save America logo from June 2021 to June 2022. Since then, however, her Twitter handle @realLizUSA has been infrequently used. She said she would move to Truth Social, a Trump-affiliated social media application that launched on February 21, 2022.On April 4, 2023, at his arraignment hearing, Trump was warned by Acting New York Supreme Court Justice Juan Merchan not to use social media to incite violence.

Hope Hicks, Trump Advisor, to Testify in Criminal Trial


Hope Hicks, a former White House adviser and communications director under President Donald Trump, is set to testify in his criminal trial. Hicks will be questioned about her knowledge of a deal between Trump and the National Enquirer tabloid to bury damaging stories during the 2016 election. Trump faces 34 felony counts related to falsifying business records. Hicks has been associated with Trump since 2014, starting with the Trump Organization and later becoming part of his presidential campaign and administration. She resigned from her role in 2018.

Donald Trump (Wikipedia)


Donald John Trump (born June 14, 1946) is an American politician, media personality, and businessman who served as the 45th president of the United States from 2017 to 2021. Trump received a Bachelor of Science in economics from the University of Pennsylvania in 1968, and his father named him president of his real estate business in 1971. Trump renamed it the Trump Organization and reoriented the company toward building and renovating skyscrapers, hotels, casinos, and golf courses. After a series of business failures in the late twentieth century, he successfully launched side ventures that required little capital, mostly by licensing the Trump name. From 2004 to 2015, he co-produced and hosted the reality television series The Apprentice. He and his businesses have been plaintiff or defendant in more than 4,000 state and federal legal actions, including six business bankruptcies.Trump won the 2016 presidential election as the Republican Party nominee against Democratic Party nominee Hillary Clinton while losing the popular vote. During the campaign, his political positions were described as populist, protectionist, isolationist, and nationalist. His election and policies sparked numerous protests. He was the first U.S. president with no prior military or government experience. A special counsel investigation established that Russia had interfered in the 2016 election to favor Trump's campaign. Trump promoted conspiracy theories and made many false and misleading statements during his campaigns and presidency, to a degree unprecedented in American politics. Many of his comments and actions have been characterized as racially charged or racist and many as misogynistic.As president, Trump ordered a travel ban on citizens from several Muslim-majority countries, diverted military funding toward building a wall on the U.S.–Mexico border, and implemented a policy of family separations for migrants detained at the U.S. border. He weakened environmental protections, rolling back more than 100 environmental policies and regulations. He signed the Tax Cuts and Jobs Act of 2017, which cut taxes for individuals and businesses and rescinded the individual health insurance mandate penalty of the Affordable Care Act. He appointed Neil Gorsuch, Brett Kavanaugh, and Amy Coney Barrett to the U.S. Supreme Court. He reacted slowly to the COVID-19 pandemic, ignored or contradicted many recommendations from health officials, used political pressure to interfere with testing efforts, and spread misinformation about unproven treatments. Trump initiated a trade war with China and withdrew the U.S. from the proposed Trans-Pacific Partnership trade agreement, the Paris Agreement on climate change, and the Iran nuclear deal. He met with North Korean leader Kim Jong Un three times but made no progress on denuclearization.Trump refused to concede after losing the 2020 presidential election to Joe Biden, falsely claiming widespread electoral fraud, and attempted to overturn the results by pressuring government officials, mounting scores of unsuccessful legal challenges, and obstructing the presidential transition. On January 6, 2021, he urged his supporters to march to the U.S. Capitol, which many of them then attacked, resulting in multiple deaths and interrupting the electoral vote count.Trump is the only American president to have been impeached twice. After he tried to pressure Ukraine in 2019 to investigate Biden, he was impeached by the House of Representatives for abuse of power and obstruction of Congress; he was acquitted by the Senate in February 2020. The House impeached him again in January 2021, for incitement of insurrection, and the Senate acquitted him in February. Scholars and historians rank Trump as one of the worst presidents in American history.Since leaving office, Trump has continued to dominate the Republican Party and is a candidate in the 2024 Republican presidential primaries. In 2023, a civil trial jury found that Trump sexually abused E. Jean Carroll. In 2024, a New York state court found Trump liable for financial fraud. Trump is appealing both judgments. He was also indicted in New York on 34 felony counts of falsifying business records, in Florida on 40 felony counts related to his mishandling of classified documents, in Washington, D.C., on four felony counts of conspiracy and obstruction for efforts to overturn the 2020 presidential election, and in Georgia on 13 charges of racketeering and other alleged felonies committed in an effort to overturn the state's 2020 election results. Trump pleaded not guilty to all charges.

Founder of Arista Networks Agrees to Pay Nearly $1 Million to Settle Insider Trading Charges


Andreas Andy Bechtolsheim, the founder and former chairman of Arista Networks, has settled insider trading charges by paying almost $1 million. The Securities and Exchange Commission accused Bechtolsheim of misappropriating confidential information about the acquisition of Acacia Communications in July 2019, leading to illegal profits of $415,726. Bechtolsheim agreed to a settlement that includes being barred from officer or director roles in public companies for five years and paying a civil penalty of $923,740, without admitting or denying the allegations. The acquisition of Acacia by Cisco closed in March 2021.

Terraform Labs and Founder Face Trial Over Cryptocurrency Collapse


Terraform Labs and founder Do Kwon are facing trial in Manhattan for allegedly deceiving investors about the stability of TerraUSD and falsely claiming their blockchain was used in a popular Korean payment app. Kwon, currently arrested in Montenegro, designed TerraUSD and Luna, leading to a combined loss of over $40 billion when the TerraUSD peg to the dollar failed. The SEC accuses Kwon of secretly arranging to prop up TerraUSD's price and seeks civil penalties against him and Terraform, who deny wrongdoing.

Auditing Firm and Owner Charged with Massive Fraud in Trump Media Case Auditing Firm and Owner Charged with Massive Fraud in Trump Media Case Auditing Firm and Owner Charged with Massive Fraud in Trump Media Case Auditing Firm and Owner Charged with Massive Fraud in Trump Media Case Auditing Firm and Owner Charged with Massive Fraud in Trump Media Case Auditing Firm and Owner Charged with Massive Fraud in Trump Media Case

SOURCES

CNN

Trump Media’s accounting firm charged with ‘massive fraud’ | CNN Business

Matt Egan

Washington Post

Trump Media auditor charged by SEC with ‘massive fraud’

Washington Post

Yahoo! News

Trump Media’s Accounting Firm Accused of Massive Fraud Affecting More Than 1,500 SEC Filings

Yahoo! News

Business Insider

Trump Media's auditor charged with 'massive fraud' by SEC

Business Insider

Business Insider

Trump Media stock tumbles as the SEC charges its auditor with 'massive fraud'

Business Insider

The Guardian

SEC charges Trump Media auditor with ‘massive fraud’

https://www.theguardian.com/profile/dominic-rushe

NY Post

Trump Media auditor BF Borgers charged with ‘massive fraud’ by SEC, hit with ban

NY Post

Yahoo! News

Trump Media’s accounting firm charged with ‘massive fraud’

Yahoo! News

Yahoo! News

DJT Stock Falls. SEC Charges Trump Media Auditing Firm With ‘Massive Fraud.’

Yahoo! News

NBC

Trump Media auditor charged by SEC with 'massive fraud,' permanently barred from public company audits

NBC

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Shares of Trump Media Soar After Urging House Republicans to Investigate Stock Manipulation

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Insider Trading Trial Begins for Financial Executive Linked to Trump Media Deal

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Trump Media Files Complaint About Potential Market Manipulation Impacting Truth Social Stock

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Trump Media suspects illegal activity driving down the price of its shares

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Donald Trump's Stake in Truth Social Increases, Making Him $1.8 Billion Richer

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Wikipedia

Trump Media & Technology Group

Wikipedia

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Trump Media & Technology Group Corp's Volatile Stock Performance

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Trump's Media Company Seeks Nasdaq Help Against Short Selling

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Trump Media Shares Surge Amid Campaign Against Short Sellers

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Former President Trump set to receive $1.2 billion bonus in the form of additional shares in his social media company

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Former President Donald Trump delivers pizza to New York City firefighters during a campaign stop after a day in court

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Former President Donald Trump is set to receive $1.3 billion in shares from Truth Social as Trump Media & Technology Groups' share price is on the rise, making him the dominant shareholder with a potential stake of 114 million shares.

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Delaware Judge Slows Down Lawsuit Against Trump Media & Technology Group

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Former President Donald Trump set to receive $1.25 billion earnout bonus from Trump Media as stock price surpasses key threshold

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The Rollercoaster Ride of Trump Media's Stock: The Unpredictability of Meme Stocks

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Trump's Media Company Applies for H-1B Visa Despite His Prior Stance

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Singapore-based Terraform Labs and Founder Found Liable for Fraud by Manhattan Jury

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Donald Trump faces additional sanctions in hush money trial

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Donald Trump returns to New York as historic trial continues

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Wikipedia

Social media use by Donald Trump

Wikipedia

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Hope Hicks, Trump Advisor, to Testify in Criminal Trial

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Wikipedia

Donald Trump

Wikipedia

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Founder of Arista Networks Agrees to Pay Nearly $1 Million to Settle Insider Trading Charges

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Terraform Labs and Founder Face Trial Over Cryptocurrency Collapse

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