A statement from B. Riley said it was unaware of any such investigation from the U.S. Securities and Exchange Commission (SEC).
Investment bank B. Riley is under an undisclosed investigation from U.S. authorities for its deals with Brian Kahn, an alleged co-conspirator in a U.S. Department of Justice criminal case, according to a Bloomberg report, citing people familiar with the matter.
A statement from B. Riley said it was unaware of any such investigation from the U.S. Securities and Exchange Commission (SEC) but that it would cooperate fully if an investigation were to materialize. The report is “parroting baseless allegations that have been publicly made for months by short sellers intent on harming the Firm,” the statement added.
Recently, B. Riley has made big investments in the bitcoin mining space. In September 2023, bitcoin (BTC) miner Iris Energy (IREN) signed a deal to sell up to $100 million in equity to B. Riley, and in March 2023, a federal judge overseeing bitcoin miner Core Scientific’s (CORZ) Chapter 11 bankruptcy process approved a $70 million loan from B. Riley Commercial Capital to help the company get back on its feet.
Brian Kahn remains unidentified. However, the Bloomberg report cited a person familiar with the matter to say that Kahn is the CEO of Franchise Group Inc. In November 2023, a man named John Hughes, co-founder of hedge fund Prophecy Asset Management pleaded guilty to committing securities fraud to the tune of $294 million against clients and admitted that one of two co-conspirators was the CEO of a multibillion-dollar retail franchise company without officially naming Kahn.
According to the report, Kahn has been a “longstanding client” of B. Riley, and the bank had helped him lead a “management buyout of Franchise Group, or FRG, a retail company based in Delaware, Ohio.” Additionally, Nomura, a major Japanese financial group, had “led a $600 million lending syndicate for B. Riley to help finance Kahn’s takeover,” the report said, citing loan documents.
Nomura is backing several crypto-related entities, including Komainu and Ledger. The report further said Nomura isn’t the focus of the probe, which is in its early stages.
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Source: Vietnam Insider