SEC Grants Exemptive Relief for Registrants Affected by BF Borgers Suspension
Author: Destiny Aigbe
May 31, 2024
In a significant move to mitigate the impact of the permanent suspension of BF Borgers CPA PC and its owner, Benjamin F. Borgers, the Securities and Exchange Commission (SEC) has issued an exemptive order providing additional time for certain registrants to file their quarterly reports. The order, announced on May 20, 2024, acknowledges the challenges faced by issuers who must now engage new, qualified, independent, Public Company Accounting Oversight Board (PCAOB)-registered public accountants to audit or review their financial statements.
BACKGROUND
BF Borgers CPA PC, along with its owner, has been permanently suspended from appearing and practicing before the SEC as an accountant. This decision has left numerous registrants in need of new auditors to ensure compliance with the SEC's stringent financial reporting requirements. The sudden need to replace their auditors has understandably created significant hurdles for these companies.
THE SEC'S EXEMPTIVE ORDER
The SEC's order provides critical relief for affected registrants by granting them additional time to file their quarterly and transition reports on Form 10-Q. This extension applies to issuers that have filed a timely Form 12b-25, which notifies the SEC of their inability to file a report on time. The additional period granted is intended to allow these companies sufficient time to engage new, qualified, independent, PCAOB-registered public accountants.
IMPLICATIONS FOR AFFECTED REGISTRANTS
Registrants that previously retained BF Borgers now face the task of quickly finding and engaging new auditors. This process involves thorough due diligence to ensure that the new auditors are both qualified and independent, as well as registered with the PCAOB. The exemptive relief provided by the SEC is a welcome reprieve, allowing these companies the necessary time to comply with federal securities laws without the immediate pressure of looming deadlines.
STEPS FOR AFFECTED REGISTRANTS
- File Form 12b-25: Ensure that you have filed a timely Form 12b-25 with the SEC to notify them of your inability to file the report on time.
- Engage New Auditors: Begin the process of identifying and engaging a new, qualified, independent, PCAOB-registered public accountant.
- Comply with Federal Securities Laws: Work closely with the new auditors to ensure that your financial information complies with the requirements of the federal securities laws.
CONCLUSION
The SEC's decision to provide additional time for filing quarterly reports demonstrates a flexible and pragmatic approach in response to the unprecedented situation caused by the suspension of BF Borgers. This relief will help ensure that affected registrants can continue to meet their reporting obligations without undue hardship, maintaining the integrity and transparency of financial disclosures in the marketplace.
For more detailed information, registrants are encouraged to review the full text of the SEC’s order and consider consulting with legal and financial advisors to navigate this transitional period effectively.
About the Author
Destiny Aigbe
Managing Partner
Aigbe Law PLLC | Dark Alpha Capital
A Corporate and Securities Law Firm
With a robust foundation in law and finance, Destiny Aigbe has carved a distinguished career, underpinned by his pivotal role in orchestrating and managing complex transactions that have propelled companies to significant growth and market prominence. As a seasoned attorney and strategic advisor, Destiny has been instrumental in facilitating over $75 million in capital raises, demonstrating a keen acumen for securing funding and fostering investor confidence.
Destiny's leadership in the execution of six successful public listings, through meticulously structured reverse mergers and registration statements, showcases his adeptness in navigating the intricacies of the public markets and his capacity to guide companies through transformative growth phases. His involvement in five mergers as an operator further illustrates his versatile skill set, extending beyond legal expertise to include hands-on management and operational strategy, though these ventures did not involve funding.
Destiny's professional journey is marked by a commitment to excellence and a diverse range of experiences, from representing a wide spectrum of clients including public and private companies, and investment firms, to holding significant roles within the US government. His tenure with the US Department of State and the National Institutes of Health highlights his adaptability and his contribution to the advancement of entrepreneurial ventures in sectors like biotechnology and nanotechnology through strategic funding initiatives.
An alumnus of Vanderbilt University Law School, Destiny focused on Finance and Mergers & Acquisitions, further honing his expertise with a certificate in Law and Business. His foundational education in Finance was obtained with honors from the University of Maryland's Robert H. Smith School of Business, which laid the groundwork for his subsequent achievements in investment banking and legal practice.
Residing in the Washington, D.C. area, Destiny Aigbe continues to leverage his extensive experience and insightful leadership to drive innovation, growth, and success for his clients and the ventures he is involved with.
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