National investment loss lawyers KlaymanToskes is investigating allegations of misconduct related to B. Riley Financial’s recommendation that investors purchase shares of Franchise Group, Inc. (NASDAQ: FRG) as late as 2023. Franchise Group’s Chapter 11 bankruptcy filing in Delaware has resulted in significant losses for investors, raising concerns about the suitability of B. Riley’s investment recommendations and their due diligence practices.
Upon Franchise Group’s bankruptcy announcement, B. Riley Chairman Bryant Riley reportedly issued a statement to employees, stating that he felt “personally sick” about the outcome. The bankruptcy filing, which included a proposed plan for lenders to take over operations of some Franchise Group businesses such as Vitamin Shoppe, also left other assets, including American Freight, in the process of liquidation.
Franchise Group’s Chapter 11 bankruptcy filing followed prior announcements of write-downs totaling as much as $370 million and shareholder losses of $120 million for B. Riley. Franchise Group, which became a key holding of B. Riley after the firm assisted in arranging a $2.8 billion buyout, saw its shares plunge in value, contributing to a 12% drop in B. Riley’s stock price. Further complicating the matter, Brian Kahn, the co-founder and former CEO of B. Riley, is under federal investigation for his alleged involvement with the now-defunct Prophecy Asset Management hedge fund, a scandal that has heightened investor concerns.
KlaymanToskes is investigating whether B. Riley Financial’s recommendation of Franchise Group, Inc. (FRG) stock violated securities rules and industry standards, including:
If you suffered significant losses due to B. Riley’s recommendation to invest in Franchise Group, Inc., you may be entitled to recover your losses. KlaymanToskes is dedicated to helping investors hold brokerage firms accountable for unsuitable recommendations, failure to disclose material risks, and other misconduct. Contact us at 888-997-9956 or investigations@klaymantoskes.com for a free and confidential consultation to discuss your potential recovery options.