B. Riley misses report to regulators as it struggles to value assets

investmentnews.com:

B. Riley Financial Inc., the embattled investment firm, is struggling to value its assets after months of concern about flawed accounting and a federal investigation culminated in a 52% one-day plunge.

The investment firm late Monday said it couldn’t file its quarterly report with regulators on time, promising only that it would file “as promptly as practical.” The delay, it said, was due to problems in valuing its loans and investments — similar to a weakness auditors identified in April in the company’s annual report.

The Los Angeles-based investment firm suspended its dividend, announced its biggest-ever quarterly loss and confirmed the US Securities and Exchange Commission is investigating the business. B. Riley faces a widening US probe into its accounting practices and deals with a former business partner tied to a collapsed investment fund, Bloomberg News reported. 

That sent B. Riley’s shares into a tailspin, and lenders to the firm and its founder sought to reassure investors on the value of the collateral they hold. It’s the third time this year that B. Riley missed a regulatory filing deadline.

The SEC is assessing whether the Los Angeles-based investment firm adequately disclosed the risks embedded in some of its assets, people familiar with the matter said. The agency is also seeking information on the interactions between founder Bryant Riley and longtime business partner Brian Kahn, the former chief executive of Franchise Group Inc., or FRG, the people said. FRG is one of B. Riley’s larger investment holdings.

The inquiry includes a review of possible improper trading by other insiders, said the people, who asked for anonymity because the probe hasn’t been announced by the agency.Another topic regulators