B. Riley slides as co-founder’s go-private offer fails to stem selloff By Reuters

(Reuters) – B. Riley Financial shares dropped 8.6% in premarket trading on Monday, coming off a turbulent week that ended in the co-founder and co-CEO Bryant Riley offering to buy the bank.

The Los Angeles, California-based lender stock ended 16% higher at $5.85 on Friday. Still, below Riley’s unsolicited offer of $7 apiece that values the investment bank at $212 million, reflecting a 39% premium to the stock’s Thursday close.

Last week, the stock plummeted by a record 65.5% and hit a decade low after the bank warned of a second-quarter loss, adding to concerns over its ill-fated investment in Vitamin Shoppe-owner Franchise Group (NASDAQ:), which has been under scrutiny.

B. Riley and its CEO received subpoenas from the U.S. Securities and Exchange Commission in July. The subpoenas were primarily related to the bank’s dealings with Franchise’s former CEO, Brian Kahn.

In November, Bloomberg News reported that Kahn was a co-conspirator in a securities fraud involving Prophecy Asset Management.

Kahn has denied the allegations made in the report, saying he never knew that Prophecy Asset was allegedly defrauding investors. Earlier this year, an external investigation as well as an internal review cleared B. Riley of any wrongdoing.