FINRA Opens Examination Into B. Riley's Wealth Management Operations Amid Ongoing Regulatory Pressure

Posted on May 27th, 2025 at 1:39 PM
FINRA Opens Examination Into B. Riley's Wealth Management Operations Amid Ongoing Regulatory Pressure

From the desk of Jim Eccleston at Eccleston Law

B. Riley Financial Inc. continues to draw regulatory attention, with the firm recently disclosing that FINRA has launched a cause examination into its wealth management division. According to AdvisorHub, the firm revealed the inquiry in a filing with the U.S. Securities and Exchange Commission.

B. Riley characterized the inquiry as a “routine request” for information, adding that the firm has complied as it does with all similar inquiries. The company declined to disclose further details.

AdvisorHub reports that the disclosure comes as B. Riley faces several legal and regulatory challenges. The SEC is actively investigating the firm’s business dealings, particularly its involvement with Franchise Group, Inc. (FRG), a bankrupt retail conglomerate and one of B. Riley’s largest past investments.

In January, the firm acknowledged receiving SEC subpoenas requesting information related to FRG, whose assets included retail chains like Vitamin Shoppe.

Further complicating matters, B. Riley is defending itself in a pending FINRA arbitration involving seven claimants alleging securities law violations linked to FRG. Additionally, a private investor in the August 2023 management-led buyout of FRG has filed an arbitration claim alleging that B. Riley fraudulently induced their participation in the transaction. The firm stated in its filing that it intends to “vigorously” contest these claims.

According to AdvisorHub, B. Riley’s financial position has deteriorated sharply, with its stock losing over 90 percent of its value in the past year amid operational losses, failed investments, and delayed financial reporting. The firm remains overdue on filing its audited 2024 results, citing outstanding prior filings and the need to assess potential impairments.

 

Eccleston Law LLC represents investors and financial advisors nationwide in securities, employment, transition, regulatory, and disciplinary matters.

Tags: eccleston, eccleston law, finra

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