Investors who purchased B. Riley baby bonds have experienced steep declines in market value—ranging from 40% to 75%—and are now facing growing concerns over default risks, subordinated debt status, and potential regulatory violations. If you’ve invested in these securities, you may be wondering whether your financial advisor truly acted in your best interest. This article explores the key risks associated with B. Riley baby bonds and what steps you may be able to take to recover losses.
If you or someone you know has suffered significant investment losses working with B. Riley baby bonds, don’t hesitate to reach out to Meyer Wilson Werning today. Our attorneys are experienced in securities fraud cases and will help to guide you through the process with a free consultation to determine whether your losses are the result of actionable misconduct.
Understanding B. Riley Baby Bonds and the Financial Exposure to Investors
What Are B. Riley Baby Bonds?


B. Riley Financial has raised over $1.5 billion from retail investors through the sale of “baby bonds”—subordinated debt securities sold in small denominations, often just $25 per unit. These bonds include:
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RILYM 6.25% Notes due 2025
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RILYG 5% Notes due 2026
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RILYK 5.5% Notes due 2026
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RILYZ 5.25% Notes due 2028
While the low entry point may have appeared appealing to retail investors, these bonds carry significant risk. Their subordinated status means they rank below other forms of corporate debt, making investors more vulnerable in the event of default. The recent 40%-75% drop in market value further underscores the potential for financial harm.
Market Instability and Rising Yields
The current market outlook for B. Riley baby bonds is troubling. Declining prices and a spike in yields are symptoms of deteriorating investor confidence in the company’s financial health.
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Yield spikes suggest heightened risk perceptions and declining trust in the bond issuer.
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Falling bond prices signal reduced resale value for investors, increasing the likelihood of losses if sold before maturity.
This volatility has raised alarms for both individual investors and legal professionals monitoring the situation.
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Potential Regulatory Violations and Advisor Misconduct
Were Investors Properly Warned?
One of the most serious issues arising from the sale of these bonds is whether financial advisors disclosed the true level of risk. If investors were not informed of the bonds’ subordinated status or the issuer’s financial instability, this may represent a violation of Regulation Best Interest (Reg BI).
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Unsuitable recommendations: Financial advisors may have promoted B. Riley baby bonds to investors for whom these high-risk products were inappropriate.
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Omitted risk disclosures: Some investors report they were not told about the potential for default or the meaning of subordination.
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Commission incentives: The structure of these offerings may have encouraged advisors to prioritize commissions over investor outcomes.
If you were misled or not given full information, you may be eligible to pursue a legal claim.
Steps to Take If You Own B. Riley Baby Bonds
If you invested $50,000 or more in B. Riley baby bonds, especially based on a financial advisor’s recommendation, you may want to take the following steps:
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Review your account records for how these bonds were presented and whether adequate risk disclosures were provided.
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Document all communications with your financial advisor regarding these investments.
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Consult a securities attorney to evaluate whether you have grounds for a claim.
Understanding the Arbitration Process

Many investor complaints are resolved through arbitration, a structured legal process where disputes are heard by neutral arbitrators instead of in court. This process can:
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Provide financial compensation if wrongdoing is proven
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Hold brokerage firms accountable for unsuitable recommendations
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Address misconduct like omissions, misrepresentations, and regulatory violations
Our lawyers are nationwide leaders in investment fraud cases.
Supporting Investors Facing Losses from B. Riley Baby Bonds
Losses due to B. Riley baby bonds may be linked to inadequate disclosures, unsuitable recommendations, or other forms of financial advisor misconduct.
If you or someone you know has been a victim of the decline in B. Riley baby bonds, contact our team at Meyer Wilson Werning today. With over 20 years of experience and $350 million in recovered losses for our clients, we are well-versed in handling cases such as these.
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Frequently Asked Questions
How can I file a claim against B. Riley?
To file a claim against B. Riley, you may need to engage in the FINRA arbitration process, which is mandatory for all registered brokerage firms. An experienced securities lawyer can walk you through this process.
What are the potential outcomes of a class action lawsuit?
Potential outcomes of a class action lawsuit include financial compensation for affected investors and accountability for the firms involved in the sale of the bonds.
How does the yield spike affect my investment?
A spike in yield indicates increased risk and speculation, suggesting that investors are demanding higher returns due to concerns about the bonds’ viability.
What are my rights as an investor in this situation?
As an investor, you have the right to seek legal recourse if you were misled about the risks associated with your investments in B. Riley baby bonds.
Recovering Losses Caused by Investment Misconduct.