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B. Riley (RILY) Faces Securities Class Action After Reports of SEC Investigation Into Ties With Client Allegedly Linked To Securities Fraud - Hagens Berman
Globe Newswire 26-Jan-2024 11:15 AM
SAN FRANCISCO, Jan. 26, 2024 (GLOBE NEWSWIRE) -- Hagens Berman urges B. Riley Financial, Inc. (NASDAQ:RILY) investors who suffered substantial losses to submit your losses now.
B. Riley Financial, Inc. (NASDAQ:RILY) Securities Fraud Class Action:
The litigation focuses on B. Riley's assistance to its client, Brian Kahn, the then-CEO of Franchise Group, Inc. ("FRG"), in the $2.8 billion management-led buyout of FRG. The deal closed on Aug. 21, 2023 and B. Riley reportedly invested $216.5 million in an equity financing to facilitate it.
The complaint alleges B. Riley misrepresented and failed to disclose to investors: (1) that Brian Kahn had been credibly implicated in a conspiracy to defraud investors of millions of dollars; (2) that, despite this involvement, B. Riley continued to finance the transaction enabling Kahn and others to take FRG private through complex arrangements; and (3) the foregoing was reasonably likely to draw regulatory scrutiny to B. Riley.
Investors began to learn the truth on Nov. 2, 2023, when Bloomberg reported that Kahn had been identified as "Co-conspirator-2" in a conspiracy to defraud investors of $294 million that the DOJ was prosecuting.
Then, on Nov. 9, 2023, B. Riley revealed significant details about the FRG transaction and the years-long series of complex financial transactions among B. Riley, Kahn, and their company's respective subsidiaries culminating in the Aug. 21, 2023 FRG transaction.
These events sent the price of B. Riley shares sharply lower.
More recently, on Jan. 20, 2024, FRG abruptly replaced Kahn as its CEO.
Finally, on Jan. 21, 2024, Reuters reported that "U.S. authorities are investigating B. Riley's deals with a client who was linked to a securities fraud, and the use of his assets to help the investment bank obtain a loan from Nomura Holdings[.]" The report also said, "[t]he SEC has carried out interviews in recent months about B. Riley and its relationship with Brian Kahn[,]" and "SEC officials have been scrutinizing how Kahn led a buyout of Vitamin Shoppe owner Franchise Group last year in a deal arranged by B. Riley[.]" Reuters added that "Nomura partly financed the transaction, with some of Kahn's assets pledged as collateral."
If you invested in B. Riley and have substantial losses, or have knowledge that may assist the firm's investigation, submit your losses now »
If you'd like more information and answers to frequently asked questions about the B. Riley case and our investigation, read more »
Whistleblowers: Persons with non-public information regarding B. Riley should consider their options to help in the investigation or take advantage of the SEC Whistleblower program. Under the new program, whistleblowers who provide original information may receive rewards totaling up to 30 percent of any successful recovery made by the SEC. For more information, call Reed Kathrein at 844-916-0895 or email RILY@hbsslaw.com.
About Hagens Berman Hagens Berman is a global plaintiffs' rights complex litigation law firm focusing on corporate accountability through class-action law. The firm is home to a robust securities litigation practice and represents investors as well as whistleblowers, workers, consumers and others in cases achieving real results for those harmed by corporate negligence and fraud. More about the firm and its successes can be found at hbsslaw.com. Follow the firm for updates and news at @ClassActionLaw.
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