- Crypto-supporting investment bank B. Riley Financial is under investigation in the United States.
- B. Riley has been linked to a fraudulent scheme by associating with a client.
- The financial service company serves as an investor for cryptocurrency organizations.
The U.S. Securities and Exchange Commission (SEC) is constantly on the lookout for fraudulent schemes, cracking down on shady maneuvers and illicit transactions.Ā
B. Riley Financial, a financial service provider renowned for supporting blockchain and cryptocurrency-based firms, is the latest to come under scrutiny for alleged involvement in a securities fraud scheme.
SEC Investigates Crypto-Backer B. Riley
According to a Bloomberg report on Monday, January 22, the SEC is investigating the financial transactions and dealings of B. Riley Financial Inc.
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Citing anonymous sources, the report stated that the focus of the investigation is centered on the company’s connection with a client, Brian Kahn, whose connection as an unidentified co-conspirator in the U.S. Department of Justice criminal case linked to the 2020 collapse of the Prophecy Asset Management hedge fund.
The SEC is investigating the connection between B. Riley and Brian Kahn, specifically focusing on Khan’s role in the 2023 buyout of Franchise Group Inc. Nomura partially financed the deal, in which Khan’s assets were reportedly used as collateral.
B. Riley has reportedly denied knowledge of the allegations, stating, āWe 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.ā
The firm’s shares have sharply declined in response to the news, dipping nearly 21% in premarket trading on Monday.
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