B. Riley Fails to File Audited Results as Grace Period Ends


(Bloomberg) — B. Riley Financial Inc., the boutique investment bank under attack from short sellers about its dealings with a former business partner, failed to file its audited results after an extension period ended.

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The company said it continues to work with its auditors as it seeks to complete and file its annual report “as soon as reasonably practicable,” it said in a statement.

Shares in the bank were down about 6% as of 5:30 p.m. in New York, after falling about 16% year to date.

A representative for the bank declined to comment beyond the statement.

The delay has added to pressure on B. Riley, whose stock has been battered by concerns about its relationship with Brian Kahn, the founder of Franchise Group Inc. B. Riley helped Kahn arrange a buyout of Franchise Group, lent money to Kahn and used some of his assets to help back a loan that B. Riley obtained from Nomura Holdings Inc.

B. Riley missed the initial deadline for filing its annual report and attributed the delay in a Feb. 29 disclosure to the board’s review of the firm’s transactions with Kahn. He was labeled as an unidentified co-conspirator in a US Department of Justice criminal case prompted by the 2020 collapse of the Prophecy Asset Management hedge fund, Bloomberg News previously reported.

Kahn has categorically denied any wrongdoing and said he was among those who lost money when Prophecy collapsed. Riley has said it had no knowledge of what happened at Prophecy and wasn’t involved with the hedge fund.

The US Securities and Exchange Commission gives companies a customary 15-day extension to file overdue reports. B. Riley missed last year’s initial deadline too, citing recent acquisitions, but was able to finish the job within the grace period. The firm said in its Feb. 29 filing that it didn’t expect significant changes to the financial results it had posted for the fourth quarter and full-year of 2023.

Read More: B. Riley Faces Investors After Deals, Profits and Stock Go Sour

B. Riley, founded by Chief Executive Officer Bryant Riley, traces its roots to 1997 as a boutique stock-picking firm focused on smaller companies. It now offers a birth-to-death business model for smaller publicly traded clients, including stock and bond offerings.

(Updates with company response in fourth paragraph.)

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