Los Angeles-based B. Riley Financial Inc., known for its investments in cryptocurrency ventures, is currently facing an investigation by the U.S. Securities and Exchange Commission (SEC).
Investigation Amidst Crypto Backings
B. Riley Financial Inc. has made headlines not only for its supportive stance in the crypto industry but also for its recent entanglement with the SEC. While the specific details of the investigation remain undisclosed, it is understood that the probe may involve transactions with clients linked to securities fraud.
Connections to a Criminal Case
Reports suggest that the SEC’s interest may be connected to Brian Kahn, a figure implicated in a Department of Justice case concerning the 2020 Prophecy Asset Management hedge fund collapse. The SEC’s current focus seems to be on unraveling Kahn’s involvement in the buyout of Franchise Group Inc., a transaction B. Riley played a role in facilitating.
Support for Bitcoin Mining Operations
B. Riley’s involvement in the crypto market is significant, with substantial investments in major Bitcoin mining companies such as Iris Energy and Core Scientific. Notably, Iris Energy secured a deal with B. Riley for a potential $100 million equity sale by 2024. Additionally, Core Scientific was offered a $72 million non-cash financing proposal by the bank, signifying B. Riley’s deep financial engagement in the crypto mining sector.
Official Statements and Responses
A representative for B. Riley has stated that the bank has not been formally approached by the SEC regarding this matter. However, they emphasized that B. Riley would cooperate fully with any inquiries, as it has consistently done with regulatory bodies in the past. As the situation unfolds, the SEC has yet to publicly charge B. Riley with any misconduct.
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