The allegations against [Brian] Kahn rippled through B. Riley's relationship with Nomura and FRG's credit rating. Loan documents show that at Nomura, a team of external advisers encouraged the Tokyo-based bank to write down the value of the loan to B. Riley, citing the allegations against Kahn and warning that the collateral for the debt may be tainted by fraud.
Kahn is, as described-ominously-in a criminal indictment as 'the CEO and president of a multibillion-dollar company that owned and managed large and diversified retail franchises,' and also as an unindicted co-conspirator in a fraud involving another collapsed hedge fund. In addition, he's a major client boutique investment bank B. Riley Financial, which helped him raise $600 million to buy a company called Franchise Group last year. $240 million of that came from Nomura, which arguably could have done a better job checking in to what it would get if something went wrong.
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