Brian Kahn Pleads Guilty to Defrauding Hedge Fund Investors (3)

Brian Kahn, the former chief executive of Franchise Group Inc., pleaded guilty to defrauding hedge fund investors of about $300 million, a scandal that hastened the collapse of the retail company he built.

At a hearing Wednesday in federal court in Trenton, New Jersey, Kahn admitted he conspired to commit securities fraud at Prophecy Asset Management, which collapsed in 2020. Kahn’s crimes occurred as he secretly acted as Prophecy’s top trader while also building Franchise Group, or FRG, into a publicly traded company. He faces as many as five years in prison.

FRG, which managed retailers of ...