LOS ANGELES - B. Riley Financial, Inc. (NASDAQ:RILY), a diversified financial services company, announced the completion of its internal audit concerning a management-led buyout of Franchise Group (NASDAQ:FRG) and its relationship with an individual implicated in unrelated criminal charges. The review, conducted by outside counsel Sullivan & Cromwell LLP, was initiated after reports in November 2023 named Brian Kahn, a participant in the FRG transaction, as an unindicted co-conspirator in a case against Prophecy Asset Management's former executives.
The nine-week investigation, which examined all transactions, loans, and collateral related to Mr. Kahn, affirmed that neither B. Riley Financial nor its executives, including Bryant Riley, were involved or knowledgeable of any alleged misconduct by Prophecy. The Board of Directors emphasized that the company has no outstanding debts to Mr. Kahn and maintains a perfected first-lien security interest in Freedom VCM Holdings, LLC, FRG's post-transaction parent entity.
The company also addressed allegations aimed at manipulating its stock price, denouncing them as baseless and devoid of merit. B. Riley Financial reiterated its proper conduct and due diligence in the FRG transaction, which took place in August 2023, and confirmed its confidence in the integrity of the company's reporting on these matters.
B. Riley Financial offers a range of services, including investment banking, institutional brokerage, and investment management, and is involved in senior secured loans for asset-rich companies. The company's statement also included a cautionary note regarding forward-looking statements, reminding investors of the inherent risks and uncertainties in such predictions.
This news is based on a press release statement from B. Riley Financial. The company's stock performance and financial health remain a point of interest for shareholders and the market following these recent clarifications.
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