RILY CLASS ACTION NOTICE

The Law Offices of Frank R. Cruz Files Securities Fraud Lawsuit Against B. Riley Financial, Inc.

The Law Offices of Frank R. Cruz announces that it has filed a class action lawsuit in the United States District Court for the Central District of California, captioned Coan v. B. Riley Financial, Inc., et al., Case No. 24-cv-662, on behalf of persons and entities that purchased or otherwise acquired B. Riley Financial, Inc. (“B. Riley” or the “Company”) (NASDAQ: RILY) common stock between May 10, 2023 and November 9, 2023, inclusive (the “Class Period”). Plaintiff pursues claims under Sections 10(b) and 20(a) of the Securities Exchange Act of 1934 (the “Exchange Act”).

Investors are hereby notified that they have until 60 days from this notice to move the Court to serve as lead plaintiff in this action.

If you are a shareholder who suffered a loss, click here to participate.

In May 2023, B. Riley entered into an agreement to assist its client, Brian Kahn, in leading a management buyout of Franchise Group, Inc. (“FRG”). Kahn is CEO of FRG. The $2.8 billion deal was completed on August 21, 2023.

On November 2, 2023, Kahn was implicated as the unnamed coconspirator in a conspiracy to defraud investors of $294 million in funds. Specifically, the Department of Justice announced that Prophecy Asset Management (“Prophecy”) president John Hughes (“Hughes”) had pled guilty to the charge with two unnamed co-defendants, and the SEC filed a complaint against Hughes for the same misconduct. Bloomberg reported on that same day that Kahn had been identified by “a person familiar with the matter” as one of the unnamed conspirators.

On November 3, 2023, after the market closed, The Friendly Bear tweeted, doubting whether B. Riley knew of Kahn’s involvement and disclosed the same to Nomura. The Friendly Bear also commented that the DOJ’s “charging document clearly implicates him [i.e., Kahn] in Hughes’ crime. There is a high chance of indictment here.” On this news, the Company’s stock price dropped $9.02, or 22%, to close at $32.54 per share on the next trading day, November 6, 2023, on unusually heavy trading volume.

On November 9, 2023, after the market closed, the Company revealed significant details concerning the FRG transaction and the years-long series of complex financial transactions between B. Riley, Kahn, and the Company’s respective subsidiaries, which culminated in the August 21, 2023 transaction. Analyzing these complex transactions, The Friendly Bear reported that “B Riley ended up funding 281MM of what was around a 560MM equity check. That’s over 50% ownership. Yet they claim to have only 31% voting rights. It looks like B Riley engaged in some funny business to avoid consolidation and placed control of FRG in the hands of the star of ‘Prophecy’ - Brian Kahn.”