B. Riley Financial, Inc. RILY experienced a more than 7% drop in its shares on Thursday following a report released by The Bear Cave. In response, B. Riley has issued a rebuttal addressing each of the allegations made in the report.
The Allegations:
The Bear Cave report suggests that B. Riley’s audit engagement partner at Marcum LLP, James LaRocca, may have recently departed from the firm.
B. Riley refuted this claim, stating, “B. Riley continues to work with its auditors.”
Additionally, the company responded to the report’s assertion that the collateral underpinning B. Riley’s $201 million loan to Brian Kahn is double pledged.
In response to this, B. Riley stated, “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.”
Finally, the Bear Cave report claims that Marcum has “numerous concerns about B. Riley” and sought outside legal representation “in connection with regulatory matters” in response.
B. Riley denounced this report, stating, “This report and the continued falsehoods being perpetuated by short sellers are clear and transparent market manipulation.” The company also noted that it was not contacted by the author of The Bear Cave report before its publication.
Related News: Toast Stock Pops After Hours On Q4 Performance – Here’s Why
RILY Price Action: According to Benzinga Pro, B. Riley shares are down 2.80% at $17.18 at the time of publication.
Image: PublicDomainPictures from Pixabay