425 Broadhollow Road
Suite 416
Melville, NY 11747

Freiberger Haber LLP
420 Lexington Avenue
Suite 300
New York, NY 10170


Enforcement News: More Than 1,500 SEC Filings Affected By Alleged Fraud Perpetrated By Accounting Firm and Its Owner

Print Article
  • Posted on: May 8 2024

By: Jeffrey M. Haber

On May 3, 2024, the Securities and Exchange Commission (“SEC” or “Commission”) announced (here) that it charged audit firm BF Borgers CPA PC and its owner, Benjamin F. Borgers (together, “Respondents”),1 with deliberate and systemic failures to comply with Public Company Accounting Oversight Board (“PCAOB”) standards in its audits and reviews incorporated in more than 1,500 SEC filings from January 2021 through June 2023. The SEC also charged Respondents with falsely representing to their clients that the firm’s work would comply with PCAOB standards; fabricating audit documentation to make it appear that the firm’s work complied with PCAOB standards; and falsely stating in audit reports included in more than 500 public company SEC filings that the firm’s audits complied with PCAOB standards.2

To settle the charges, Respondents agreed to pay a civil penalty totaling $14 million. Both Respondents also agreed to permanent suspensions from appearing and practicing before the Commission as accountants, effective immediately.3

In its order (here), the SEC found4 that, among other things, Respondents failed to adequately supervise and review the work of the team performing the audits and reviews; did not properly prepare and maintain audit documentation, known as “workpapers;” and failed to obtain engagement quality reviews, without which an audit firm may not issue an audit report. According to the SEC, of 369 BF Borgers clients whose public filings from January 2021 through June 2023 incorporated BF Borgers’s audits and reviews, at least 75 percent of the filings incorporated BF Borgers’s audits and reviews that did not comply with PCAOB standards.

The SEC further found that the individual Respondent directed BF Borgers staff to copy workpapers from previous engagements for their clients, changing only the relevant dates, and then passed them off as workpapers for the current audit period. As a result, the SEC found, BF Borgers’s workpapers falsely documented work that had not been performed. Among other things, the workpapers regularly documented purported planning meetings – required to discuss a client’s business and consider any potential risk areas – that never occurred and falsely represented that the individual Respondent, as the partner in charge of the engagement, and an engagement quality reviewer had reviewed and approved the work.

Finally, the SEC found that Respondents engaged in improper professional conduct and violated, and caused violations of, the antifraud, recordkeeping, and other provisions of the federal securities laws. 

Without admitting or denying the SEC’s findings as to each of them, both Respondents consented to an order, effective immediately, pursuant to which they are ordered to pay civil penalties and are denied the privilege of appearing or practicing before the Commission as an accountant, as discussed above. In addition, they are censured and must cease and desist from committing or causing violations of the relevant provisions of the federal securities laws.

Commenting on the charges and settlement, Gurbir S. Grewal, Director of the SEC’s Division of Enforcement, stated: 

Ben Borgers and his audit firm, BF Borgers, were responsible for one of the largest wholesale failures by gatekeepers in our financial markets. As a result of their fraudulent conduct, they not only put investors and markets at risk by causing public companies to incorporate noncompliant audits and reviews into more than 1,500 filings with the Commission, but also undermined trust and confidence in our markets. Because investors rely on the audited financial statements of public companies when making their investment decisions, the accountants and accounting firms that audit those statements play a critical role in our financial markets. Borgers and his firm completely abandoned that role, but thanks to the painstaking work of the SEC staff, Borgers and his sham audit mill have been permanently shut down.


  1. In 2023, Audit Analytics, a research firm, listed BF Borgers as the eighth-largest auditing firm, with 187 SEC registrant clients (here).
  2. Many of the 500 companies are small-cap stocks that trade over the counter.
  3. As reported by Politico (here), “[t]he SEC’s settlement marks the latest run-in with regulators for BF Borgers, which previously faced disciplinary action from Colorado officials. Last month, Canada’s audit regulator terminated BF Borgers’s registration in the country [here].”
  4. As noted in the SEC’s order, Respondents consented to order “without admitting or denying the findings [t]herein, except as to the Commission’s jurisdiction over them and the subject matter of the[ ] proceedings.”

Jeffrey M. Haber is a partner and co-founder of Freiberger Haber LLP.

This article is for informational purposes and is not intended to be and should not be taken as legal advice.

Freiberger Haber LLP
Copyright ©2022 Freiberger Haber LLP | Disclaimer
Attorney advertisement | Prior results do not guarantee a similar outcome.
425 Broadhollow Road, Suite 416, Melville, NY 11747 | (631) 574-4454
420 Lexington Avenue, Suite 300, New York, NY 10017 | (212) 209-1005
Attorney Website by Omnizant