The Allegations
The Bear Cave recently published a report, causing B. Riley Financial, Inc. shares to fall by over 7%. The report detailed three key allegations against B. Riley, each of which the company has responded to.
Response to Allegations
Firstly, the report alleged that B. Riley’s audit engagement partner at Marcum LLP, James LaRocca, may have left the firm. In response, B. Riley stated that they “continue to work with its auditors” and did not confirm LaRocca’s departure.
Secondly, The Bear Cave report claimed that the collateral underpinning B. Riley’s $201 million loan to Brian Kahn is double pledged. B. Riley refuted this claim, asserting that they have a “perfected first lien security interest in the shares collateralizing its loan” and that a simple UCC search disproves the allegation of double pledging.
Finally, the report alleged that Marcum has “numerous concerns about B. Riley” and engaged outside legal counsel to “represent Marcum in connection with regulatory matters.” B. Riley responded by stating the report and the claims made in it are “clear and transparent market manipulation.” The company also emphasized that it was not contacted by the author of The Bear Cave report before its publication.
Stock Performance
RILY Price Action: According to Benzinga Pro, B. Riley shares are down 2.80% at $17.18 at the time of publication.
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