B. Riley says Bryant Riley pledged shares for loan not approved

B. Riley Financial (RILY) disclosed last night that according to previous filings with the SEC, Bryant Riley, its Chairman and co-CEO, pledged as collateral a portion of his shares of the company’s common stock in favor of Axos Bank pursuant to a credit agreement and pledge agreement with Axos Bank. While the initial 2019 loan transaction and pledge were approved by the company in accordance with its insider trading policy, Riley later pledged additional shares for which he did not receive approval under that policy, the company said. As disclosed in a schedule 13D amendment filed last night, Riley pledged a total of 5,804,124 shares of common stock in support of the loan, not 4,389,553 as reported in the May 10 proxy statement. Upon Riley’s self-reporting of certain additional pledged shares, the board authorized the audit committee to conduct an investigation of Riley’s pledges and related disclosures. Following conclusion of its investigation, the audit committee recommended to the board that the company undertake “certain remedial and personnel actions to ensure adherence to and accountability for the Company’s policies and accurate disclosures of pledged securities in the Company’s public filings,” it added. Shares of B. Riley Financial are down 3% to $5.91 in midday trading.