The Securities and Exchange Commission (SEC) has charged the audit firm BF Borgers CPA PC, based in Lakewood, and its owner, Benjamin F. Borgers, for systemic violations of Public Company Accounting Oversight Board (PCAOB) standards. The SEC alleges this occurred for over 1,500 filings from January 2021 through June 2023. In addition to non-compliance, the agency also alleges falsehood in representation and fabrication of audit documents.
As part of the settlement, BF Borgers is required to pay a $12 million civil penalty and Benjamin Borgers has to pay an additional $2 million. Both respondents have been barred from practicing and appearing before the Commission as accountants, effective immediately.
“Ben Borgers and his audit firm, BF Borgers, were responsible for one of the largest wholesale failures by gatekeepers in our financial markets,” said Gurbir S. Grewal, the Director of the SEC’s Division of Enforcement. He went on to say that due to their fraudulent conduct, the firm has compromised the trust in our markets and put investors at risk.
The SEC’s investigation revealed several infractions committed by the respondents. There was a failure in supervising and reviewing the work of the team performing the audits and reviews. The Respondents were also found to have inadequately prepared and maintained audit documentation, known as “workpapers,” and did not obtain engagement quality reviews, a requirement for issuing an audit report.
At least 75 percent of the 369 BF Borgers clients incorporated the firm’s audits and reviews into their filings that did not comply with PCAOB standards. The SEC claims that BF Borgers staff, under Benjamin Borgers’s direction, copied workpapers from previous assignments and passed them off as current, therefore documenting work that hadn’t been performed. Further, the workpapers falsely stated that relevant planning meetings had taken place and that both the partner in charge of the engagement and a quality reviewer had approved the work.
The SEC findings indicate that the respondents violated professional standards and regulations of the federal securities laws. Without admitting or denying these findings, both BF Borgers and Benjamin Borgers consented to an order requiring them to pay civil penalties and are banned from appearing or practicing before the Commission as accountants. They are also censured and ordered to cease and desist from further violations of the relevant federal securities laws.
Source: Press Release