B. Riley Financial, Inc. RILY witnessed a more than 7% plunge in its shares on Thursday, ignited by a report from The Bear Cave. B. Riley, in turn, initiated an unyielding response to confront and refute each of the allegations. Here’s a breakdown.
Addressing the Allegations:
The Bear Cave report raises suspicions about B. Riley’s audit engagement partner at Marcum LLP, James LaRocca, potentially parting ways with the firm.
“B. Riley continues to work with its auditors,” affirmed B. Riley in response.
Additionally, the company rebutted the report’s assertion that the collateral supporting 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,” countered the company’s response.
Lastly, The Bear Cave alleged that Marcum harbors “numerous concerns about B. Riley” and has sought external legal representation 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,” emphasized B. Riley in its retort to the accusation. Furthermore, the company underscored that it was not approached by the author of The Bear Cave report prior to its publication.
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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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