BF Borgers was all but shuttered by the Securities and Exchange Commission on Friday after the agency accused the firm of massive fraud impacting more than 1,500 SEC filings audited over a 2 1/2-year span.

BF Borgers and its owner, Benjamin Borgers, agreed to be permanently suspended from appearing and practicing before the commission as accountants, effective immediately, as part of a settlement, the SEC announced in a press release. The firm was fined $12 million, while Borgers agreed to pay a $2 million penalty.

“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 Grewal, director of the SEC’s Division of Enforcement, in the release.

The details: From January 2021 through June 2023, BF Borgers reported its audits were conducted in accordance with Public Company Accounting Oversight Board (PCAOB) standards, the SEC alleged in its order, despite 75 percent of the public filings it reviewed for 369 clients during the period falling short of those standards.

The firm failed to obtain an engagement quality review, as required, to provide a concurring review and approval on audits and reviews of financial statements incorporated in at least 1,625 public filings, the SEC said. Borgers, as engagement partner, did not adequately supervise the work of his engagement teams, resulting in fabrication of audit documentation, the agency continued.

At Borgers’ direction, firm staff copied workpapers from previous engagements for clients and updated dates to pass them off as new workpapers, the SEC alleged, while also documenting planning meetings to discuss client business that never occurred.

“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,” said Grewal. “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.”

In its 2022 PCAOB inspection report published in November, all 11 of BF Borgers’ audits inspected included deficiencies. The firm has received mainstream attention this year as the auditor of former President Donald Trump’s media company.

Compliance considerations: Given the impact of the allegations against BF Borgers and its suspension on its public company clients, the SEC issued a staff statement to assist those issuers in complying with their reporting obligations.

“We encourage all issuers that have previously engaged BF Borgers as their independent auditor to consider the findings and sanctions discussed in the order, taking into account their disclosure obligations under the federal securities laws,” the agency said.

BF Borgers did not respond to a request for comment.