LOS ANGELES, Jan. 31, 2024 (GLOBE NEWSWIRE) — Glancy Prongay & Murray LLP (“GPM”) reminds investors of the upcoming March 25, 2024 deadline to file a lead plaintiff motion in the class action filed on behalf of investors who purchased or otherwise acquired B. Riley Financial, Inc. (“B. Riley” or the “Company”) (NASDAQ: RILY) common stock between May 10, 2023 and November 9, 2023, inclusive (the “Class Period”).
If you suffered a loss on your B. Riley investments or would like to inquire about potentially pursuing claims to recover your loss under the federal securities laws, you can submit your contact information at www.glancylaw.com/cases/B-Riley-Financial-Inc/. You can also contact Charles H. Linehan, of GPM at 310-201-9150, Toll-Free at 888-773-9224, or via email at shareholders@glancylaw.com to learn more about your rights.
In May 2023, B. Riley entered into an agreement to assist its client, Brian Kahn, in leading a management buyout of Franchise Group, Inc. (“FRG”). Kahn is CEO of FRG. The $2.8 billion deal was completed on August 21, 2023.
On November 2, 2023, Kahn was implicated as the unnamed coconspirator in a conspiracy to defraud investors of $294 million in funds. Specifically, the Department of Justice announced that Prophecy Asset Management (“Prophecy”) president John Hughes (“Hughes”) had pled guilty to the charge with two unnamed co-defendants, and the SEC filed a complaint against Hughes for the same misconduct. Bloomberg reported on that same day that Kahn had been identified by “a person familiar with the matter” as one of the unnamed conspirators.
On November 3, 2023, after the market closed, The Friendly Bear tweeted, doubting whether B. Riley knew of Kahn’s involvement and disclosed the same to Nomura. The Friendly Bear also commented that the DOJ’s “charging document clearly implicates him [i.e., Kahn] in Hughes’ crime. There is a high chance of indictment here.” On this news, the Company’s stock price dropped $9.02, or 22%, to close at $32.54 per share on the next trading day, November 6, 2023, on unusually heavy trading volume.
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 15%, to close at $25.60 per share on November 10, 2023, on unusually heavy trading volume. The Company’s stock price continued to fall $4.59, or 14%, over the next consecutive trading session to close at $22.01 per share on November 13, 2023, on unusually heavy trading volume.
The complaint filed in this class action alleges that throughout the Class Period, Defendants made materially false and/or misleading statements, as well as failed to disclose material adverse facts about the Company’s business, operations, and prospects. Specifically, Defendants 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, in spite of this involvement, B. Riley continued to finance the transaction enabling Kahn and others to take FRG private through complex arrangements; (3) that the foregoing was reasonably likely to draw regulatory scrutiny to B. Riley; and (4) that, as a result of the foregoing, Defendants’ positive statements about the Company’s business, operations, and prospects were materially misleading and/or lacked a reasonable basis.
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If you purchased or otherwise acquired B. Riley common stock during the Class Period, you may move the Court no later than March 25, 2024 to request appointment as lead plaintiff in this putative class action lawsuit. To be a member of the class action you need not take any action at this time; you may retain counsel of your choice or take no action and remain an absent member of the class action. If you wish to learn more about this class action, or if you have any questions concerning this announcement or your rights or interests with respect to the pending class action lawsuit, please contact Charles Linehan, Esquire, of GPM, 1925 Century Park East, Suite 2100, Los Angeles, California 90067 at 310-201-9150, Toll-Free at 888-773-9224, by email to shareholders@glancylaw.com, or visit our website at www.glancylaw.com. If you inquire by email please include your mailing address, telephone number and number of shares purchased.
This press release may be considered Attorney Advertising in some jurisdictions under the applicable law and ethical rules.
Contacts
Glancy Prongay & Murray LLP, Los Angeles
Charles Linehan, 310-201-9150 or 888-773-9224
shareholders@glancylaw.com
www.glancylaw.com
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