B. Riley Financial, Inc. (NASDAQ:RILY) shares fell more than 7% on Thursday following a report from The Bear Cave. B. Riley issued a response addressing each of the allegations. Here’s a look at the details.
The Details:
The Bear Cave report alleges that B. Riley’s audit engagement partner at Marcum LLP, James LaRocca, may have recently left the firm.
“B. Riley continues to work with its auditors,” B. Riley stated.
The company also responded to the report’s claim that the collateral underpinning B. Riley’s $201 million loan to Brian Kahn is double pledged.
“B. Riley has a perfected first lien security interest in the shares collateralizing its loan (as previously discussed during our December Investor Day and repeatedly communicated since). A simple UCC search refutes any notion that these shares were double pledged,” the company stated in response.
Finally, the Bear Cave report alleges that Marcum has “numerous concerns about B.Riley” and engaged outside legal counsel to “represent Marcum in connection with regulatory matters” in response.
“This report and the continued falsehoods being perpetuated by short sellers are clear and transparent market manipulation,” stated B. Riley’s response to the allegation. B. Riley also noted that it was not contacted by the author of The Bear Cave report before it was published.
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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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