B. Riley (RILY) debt securities taking a hit...
- Thread starter BMK
- Start date
Co-Ceo buying shares for his daughters @ $20
$400K worth.
https://archive.fast-edgar.com/20231219/AG22JQ2CLZ227ZAV22ZN2ZY285WT2222Z25Q/
$400K worth.
https://archive.fast-edgar.com/20231219/AG22JQ2CLZ227ZAV22ZN2ZY285WT2222Z25Q/
Dec 11 there was news about short sellers targeting RILY for fraud. That explains why it hasn't seen $25 since. It has an amazing 66% short interest. Its starting to look like GME from 2020.
But on Dec. 11, 2023, in connection with B. Riley inaugural analyst day, activist short seller The Friendly Bear released a slide presentation entitled "Question for B. Riley Analyst Day," alleging B. Riley is likely withholding information regarding Kahn.
The presentation alleges that in Fall 2018, B. Riley loaned $30 million to a company jointly owned by Kahn, which loan it later assigned to a Kahn-owned hedge fund. The presentation further observes that B. Riley's CEO Bryan Riley and President Kenneth Young abruptly resigned from FRG' Board immediately after Deloitte resigned as auditor of Prophecy. Based on these and other factual "coincidences," The Friendly Bear posits, "We believe Bryant Riley was not being fully forthcoming about his entanglements with Kahn."
The Friendly Bear's presentation also alleges that B. Riley used related party transfers and sham loans to avoid marking down distressed legacy loans.
But on Dec. 11, 2023, in connection with B. Riley inaugural analyst day, activist short seller The Friendly Bear released a slide presentation entitled "Question for B. Riley Analyst Day," alleging B. Riley is likely withholding information regarding Kahn.
The presentation alleges that in Fall 2018, B. Riley loaned $30 million to a company jointly owned by Kahn, which loan it later assigned to a Kahn-owned hedge fund. The presentation further observes that B. Riley's CEO Bryan Riley and President Kenneth Young abruptly resigned from FRG' Board immediately after Deloitte resigned as auditor of Prophecy. Based on these and other factual "coincidences," The Friendly Bear posits, "We believe Bryant Riley was not being fully forthcoming about his entanglements with Kahn."
The Friendly Bear's presentation also alleges that B. Riley used related party transfers and sham loans to avoid marking down distressed legacy loans.
The file that you attached is not a presentation from Friendly Bear.
In all fairness, your post did not actually say that the attachment was the Friendly Bear presentation. Your post did not identify the source of the attachment.
The file you attached is a press release from a law firm that is encouraging "RILY Investors Who Suffered Substantial Losses to Contact Firm's Attorneys." Near the bottom of the second page of the attachment, the press release is identified as "attorney advertising."
But no lawsuit has actually been filed. This is a bunch of rumors and hype generated by predatory lawyers.
There is no direct connection between Riley and Prophecy, and there is no concrete evidence of any fraud or misconduct at FRG.
While the rumors and innuendo may well cause the price of RILY common stock to remain depressed for some time, I don't see how this could possibly cause a default on the baby bonds, and I think it is very, very unlikely that it will have an impact on RILY preferred stock dividends.
See my previous post:
https://www.elitetrader.com/et/thre...ities-taking-a-hit.377042/page-2#post-5897840
Just out an hour ago...
SEC probes B. Riley deals with client tied to failed hedge fund - Bloomberg News
(Reuters) - U.S. authorities are investigating B. Riley Financial'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, Bloomberg News reported.
The U.S. Securities and Exchange Commission (SEC) has carried out interviews in recent months about B. Riley and its relationship with Brian Kahn, according to the report on Sunday, citing people familiar with the matter.
Kahn is one of two co-conspirators named by co-founder of hedge fund Prophecy Asset Management John Hughes who last year pleaded guilty to securities fraud, Bloomberg had reported earlier.
"At no time during my former business relationship with Prophecy did I know that Prophecy or its principals were allegedly defrauding their investors, nor did I conspire in any fraud," Kahn has said previously in a statement to Reuters.
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, the Bloomberg report said. It added that Nomura partly financed the transaction, with some of Kahn's assets pledged as collateral.
B.Riley and the SEC did not immediately respond to Reuters' requests for comment on the report.
Shares of B. Riley have plummeted after it was forced to mark down the value of its investment in the $2.6 billion take-private deal involving Franchise Group after the company reported a decline in revenue and a net loss in the third quarter.
(Reporting by Akanksha Khushi in Bengaluru; Editing by Rashmi Aich)
SEC probes B. Riley deals with client tied to failed hedge fund - Bloomberg News
(Reuters) - U.S. authorities are investigating B. Riley Financial'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, Bloomberg News reported.
The U.S. Securities and Exchange Commission (SEC) has carried out interviews in recent months about B. Riley and its relationship with Brian Kahn, according to the report on Sunday, citing people familiar with the matter.
Kahn is one of two co-conspirators named by co-founder of hedge fund Prophecy Asset Management John Hughes who last year pleaded guilty to securities fraud, Bloomberg had reported earlier.
"At no time during my former business relationship with Prophecy did I know that Prophecy or its principals were allegedly defrauding their investors, nor did I conspire in any fraud," Kahn has said previously in a statement to Reuters.
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, the Bloomberg report said. It added that Nomura partly financed the transaction, with some of Kahn's assets pledged as collateral.
B.Riley and the SEC did not immediately respond to Reuters' requests for comment on the report.
Shares of B. Riley have plummeted after it was forced to mark down the value of its investment in the $2.6 billion take-private deal involving Franchise Group after the company reported a decline in revenue and a net loss in the third quarter.
(Reporting by Akanksha Khushi in Bengaluru; Editing by Rashmi Aich)
I saw that too. Note this part:
“We have not received anything from the SEC on this matter and to the extent the SEC makes an inquiry, we would fully cooperate as we have done in the past on all regulatory inquiries,” a spokesperson for B. Riley said in an emailed statement.
Short Sellers
“We would welcome an investigation into the outrageous tactics the short sellers have pursued to destroy B. Riley, including the coordinated options trading with zero disclosure obligations,” the statement said. “The short sellers continue to harass, intimidate, and insult employees and everyone associated with B. Riley, resorting to lies and crude remarks so they can personally profit.”
$16.50 pre-market. Down 18%.
I gotta think Riley's CEO will call in some favors from his fellow investment houses and put a floor under this thing today. 67% of the float is short. Some of that will start buying at the bell. Volume is 28K now. That'll spike at 7AM. I think it's gonna bounce. We'll see. No position atm.
I thought this post might be interesting. The OP is not a fan of the shorts.