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B. Riley Financial, Inc.

Bernstein Liebhard LLP announces that a securities class action lawsuit has been filed on behalf of investors who purchased or acquired B. Riley Financial, Inc. (“B. Riley” or the “Company”) (NASDAQ: RILY) common stock between May 10, 2023 and November 9, 2023, inclusive. The lawsuit seeks to recover B. Riley shareholders’ investment losses.

If you purchased common stock in B. Riley between May 10, 2023 and November 9, 2023, inclusive, and would like to discuss your legal rights and/or options, please click “Join Class Action” above.

According to the Complaint, B. Riley is a financial services platform.  The Company, through its subsidiaries, provides services including: investment banking, brokerage, wealth management, asset management, direct lending, business advisory, valuation, and asset disposition. B. Riley’s clients include public and private companies, financial sponsors, investors, financial institutions, and individuals.

Brian Kahn (“Kahn”) is a client of B. Riley and Chief Executive Officer of Franchise Group, Inc. (“FRG”).  In May 2023, B. Riley entered into an agreement to assist Kahn in leading a management buyout of FRG.  The $2.8 billion deal to take FRG private was completed on August 21, 2023.  The transaction was partially financed by Nomura Holdings Inc. via B. Riley, who secured the financing allowing Kahn and other senior management of FRG to acquire the remaining 64% stake that they did not already own.

Throughout the Class Period, Defendants failed to disclose to investors that: (1) Kahn had been credibly implicated in a conspiracy to defraud investors of millions of dollars; (2) in spite of 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.

On November 9, 2023, after the market closed, the Company revealed significant details concerning the FRG transaction and the years-long series of complex financial transactions between B. Riley, Kahn, and the Company’s respective subsidiaries, which culminated in the August 21, 2023 transaction.  Analyzing these complex transactions, The Friendly Bear reported that “B Riley ended up funding 281MM of what was around a 560MM equity check. That’s over 50% ownership. Yet they claim to have only 31% voting rights. It looks like B Riley engaged in some funny business to avoid consolidation and placed control of FRG in the hands of the star of ‘Prophecy’ – Brian Kahn.”

On this news, the Company’s stock price fell $4.47, or 14.8%, to close at $25.60 per share on November 10, 2023.

If you wish to serve as lead plaintiff, you must move the Court no later than March 25, 2024. A lead plaintiff is a representative party acting on behalf of other class members in directing the litigation. Your ability to share in any recovery doesn’t require that you serve as lead plaintiff. If you choose to take no action, you may remain an absent class member.

Since 1993, Bernstein Liebhard LLP has recovered over $3.5 billion for its clients. In addition to representing individual investors, the Firm has been retained by some of the largest public and private pension funds in the country to monitor their assets and pursue litigation on their behalf. As a result of its success litigating hundreds of lawsuits and class actions, the Firm has been named to The National Law Journal’s “Plaintiffs’ Hot List” thirteen times and listed in The Legal 500 for sixteen consecutive years.

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Contact Information:

Peter Allocco
Bernstein Liebhard LLP
(212) 951-2030