Arizona Firm Expelled From National Alliance Over Ties With Trump Media, Lawsuit Reveals

Semple, Marchal & Cooper (SM&C) has reportedly been expelled from a national accountancy alliance due to its association with Trump Media & Technology Group (NASDAQ:DJT), according to a recent lawsuit.

What Happened: SM&C assumed the role of auditor for TMTG in May 2024, following the closure of TMTG’s previous accounting firm for fraudulent activities. This new client relationship led to a dispute with BDO Alliance USA, a software and training provider for SM&C since 1994, reported the Financial Times.

BDO Alliance USA is one of the largest networks of accounting and professional service firms, comprising over 900 independent firm locations across nearly every U.S. state and offering a wide range of services.

The lawsuit claims that BDO, the sixth-largest accounting firm in the U.S. by revenue, threatened to terminate SM&C's membership in its alliance if the firm didn't cut ties with TMTG. BDO carried out this threat, terminating the relationship on June 30, 2024.

BDO executive Michael Horwitz reportedly justified the firm’s stance by stating, “Because he [the principal shareholder] is a criminal!” At the time, Donald Trump, the majority stakeholder in TMTG, was facing a trial in New York for falsifying business records.

The lawsuit further claims that SM&C’s expulsion from the alliance forced it to overhaul its documents and materials and retrain its employees, resulting in substantial financial costs.

SEE ALSO: Trump’s Call To Jeff Bezos Over Amazon’s Tariff Display Earns Peter Schiff’s Ire: ‘Type Of Stuff You Might Expect To See In China’

Why It Matters: The controversy surrounding TMTG has been escalating in recent times. Earlier this month, the company faced a $106 million short bet from a London-based hedge fund, Qube Research & Technologies Limited, as its shares plunged to a six-month low.

The expulsion of SM&C from the national accountancy alliance adds another layer to the ongoing saga, highlighting the potential reputational risks for firms associated with TMTG.

Meanwhile, TMTG has announced plans to launch a utility token for users accessing its Truth Social ecosystem, as part of a rewards program. This move was seen as an attempt to revitalize the company’s fortunes amid the ongoing legal and financial challenges.

DJT stock climbed nearly 28% over the past month. On Tuesday, it closed 3.29% lower to close at $24.98, as per Benzinga Pro.

• READ MORE: Mark Cuban Once Questioned Whether Donald Trump Is Really a Billionaire, Here's What He Said – Benzinga

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Disclaimer: This content was partially produced with the help of AI tools and was reviewed and published by Benzinga editors.