According to the Complaint, B. Riley Financial, Inc. is a financial services platform. The Company, through its subsidiaries, provides services including: investment banking, brokerage, wealth management, asset management, direct lending, business advisory, valuation, and asset disposition. B. Riley’s clients include public and private companies, financial sponsors, investors, financial institutions, and individuals.

Franchise Group, Inc. ("FRG") is a holding company which acquires and manages companies, primarily franchises. FRG is a client of B. Riley.

In May 2023, B. Riley entered into an agreement to assist the CEO of FRG in leading a management buyout of FRG. The $2.8 billion deal was completed on August 21, 2023.

The Complaint alleges that throughout the Class Period, Defendants made materially false and/or misleading statements, as well as failed to disclose material adverse facts about the Company’s business, operations, and prospects. Specifically, the Complaint alleges Defendants failed to disclose to investors: (1) that the CEO of FRG had been credibly implicated in a conspiracy to defraud investors of millions of dollars; (2) that, in spite of this involvement, B. Riley continued to finance the transaction enabling the CEO and others to take FRG private through complex arrangements; (3) that the foregoing was reasonably likely to draw regulatory scrutiny to B. Riley; and (4) that, as a result of the foregoing, Defendants’ positive statements about the Company’s business, operations, and prospects were materially misleading and/or lacked a reasonable basis.