Crypto Mining Investor B.Riley Facing SEC Probe
B.Riley, an investment firm that has backed numerous Bitcoin mining projects, is allegedly involved in a probe brought forth by the United States Securities and Exchange Commission (SEC), according to a new report from Bloomberg.
The report , released January 21st, alleges that B. Riley helped to broker last year’s buyout of Franchise Group Inc. on behalf of Brian Kahn, a co-conspirator in the Department of Justice’s Prophecy Asset Management case, wherein “some of Kahn’s assets” were “pledged as collateral.” Japanese financial group Nomura “partly financed the transaction,” which was estimated to be $2.6 billion. As of Monday morning, B.Riley’s stock was down by nearly 11% following the news. “B. Riley Financial is not aware of any such SEC investigation regarding any of these matters and, in the event one were to materialize, would cooperate fully with it,” the investment firm said in a January 22nd statement.
In November 2023, Prophecy Asset Management co-founder, John Huges, pleaded guilty to defrauding clients out of $294 million . Hughes stated he worked with two co-conspirators, with sources identifying them as Kahn and Prophecy Asset Management CEO Jeffery Spotts. “At no time during my former business relationship with Prophecy did I know that Prophecy or its principals were allegedly defrauding their investors, nor did I conspire in any fraud,” Khan said in a statement last November reported by Bloomberg. “Like many other investors, my relationship with Prophecy was costly, including economically, and I ceased doing business with Prophecy several years ago. In no way, shape of form has this previous relationship impacted Franchise Group.
Meanwhile, B. Riley denied any involvement in the multi-year fraud
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