According to CoinDesk, investment bank B. Riley is reportedly under investigation by U.S. authorities for its deals with Brian Kahn, an alleged co-conspirator in a U.S. Department of Justice criminal case. B. Riley stated that it was unaware of any investigation from the U.S. Securities and Exchange Commission (SEC) but would cooperate fully if an investigation were to materialize. The bank has recently made significant investments in the bitcoin mining space, including a deal with Iris Energy and a loan to Core Scientific.
Brian Kahn remains unidentified, but a Bloomberg report cited a person familiar with the matter who said that Kahn is the CEO of Franchise Group Inc. In November 2023, John Hughes, co-founder of hedge fund Prophecy Asset Management, pleaded guilty to committing securities fraud and admitted that one of two co-conspirators was the CEO of a multibillion-dollar retail franchise company, without officially naming Kahn. B. Riley has been a longstanding client of Kahn and helped him lead a management buyout of Franchise Group. Nomura, a major Japanese financial group, led a $600 million lending syndicate for B. Riley to help finance Kahn's takeover but is not the focus of the probe.