News & Insights

Auditor Liability Bulletin

May 3, 2024

SEC Ordered Permanent Suspensions and Civil Penalties of $14 Million for “Massive Fraud Affecting More Than 1,500 SEC Filings”


On May 3, 2024, without admitting or denying the findings, BF Borgers CAP PC (“BF Borgers”) and Benjamin Borger, the owner and sole audit partner of BF Borgers, (collectively “Respondents”) settled with the Commission for violations of PCAOB standards. The Commission charged Respondents with “deliberate and systematic failure to audit and review” its clients financial statements pursuant to PCAOB standards and the “fraudulent issuance of audit reports falsely representing that they had done so from at least January 2021 through at least June 2023.” The Commission specifically charged Respondents with (i) failing to obtain engagement quality reviews for “at least 1,625 public filings and disclosures … representing at least 75% of their clients’ public filings and disclosures incorporating such audits and reviews,” (ii) failing to adequately supervise and review the work of teams performing the audits and reviews, and (iii) failing to prepare and maintain audit documentation, where Borgers had “authorized” staff and contractors “to copy audit workpapers from previous audits as the final workpapers for new audit engagements.”

Respondents agreed to a censure, permanent suspensions from appearing and practicing before the Commission as accountants, to cease-and-desist from committing or causing any violations and any future violations, and combined civil penalties of $14 million—with BF Borgers receiving a $12 million civil penalty and Borgers receiving a $2 million civil penalty.

Commission Staff for the Division of Corporation Finance and Office of the Chief Accountant also issued a statement in light of the order noting, “[w]e are issuing this statement to assist issuers in complying with their disclosure and reporting obligations in light of the Order” as a “significant number of issuers” had engagements with BF Borgers, and provided a list of actions that registrants whose financial information was audited or reviewed by BF Borgers must take.

The SEC order is here, SEC press release is here, and Staff statement is here.