SEC creates special filing extension for clients of ‘sham audit mill’ BF Borgers

Remember Benjamin Borgers? The terrible speller whose firm, BF Borgers, was banned by the Securities and Exchange Commission (SEC) earlier this month over shoddy audits, fraudulent reports, and putting clients on the wrong side of securities law? Some of his former clients will get an extra 30 days to file their Form 10-Q for the quarter that ended March 31, the commission announced earlier this week.

Under normal circumstances, a company can get five more days to file quarterly earnings reports. But after the SEC banned BF Borgers on May 3, the firm’s clients—including former President Trump’s media company—found themselves without an auditor right as quarterly filings were coming due.

Since there are only so many auditors who can step in, the SEC said, and because those auditors may need to review past quarterly financials in addition to the most recent one, the agency will add 25 days to the extension for companies that filed their Form 12b-25 on time.

The new audit firms will have their work cut out for them. In its announcement of the May 3 settlement, the SEC alleged that BF Borgers “failed to obtain engagement quality reviews” and created phony audit documentation that pasted information from past work and listed work that the firm didn’t do. It charged Borgers and his firm with “with deliberate and systemic failures” regarding how it followed standards of the Public Company Accounting Oversight Board in audits and reviews of financial information that were used by 369 clients and put into more than 1,500 SEC filings from 2021 through mid-2023.

The commission’s top cop, Gurbir S. Grewal, called BF Borgers a “sham audit mill” that, with its owner, “[was] responsible for one of the largest wholesale failures by gatekeepers in our financial markets.” Borgers and his firm have agreed to pay combined fines of $14 million.