“Murstein allegedly paid for more than 50 articles and hundreds of positive comments, which were really paid advertisements placed across the web in an effort to deceive investors about the value o…
The brash boss of a New York City taxi medallion lender secretly paid for favorable news stories about his struggling company in a bid to boost its stock price, according to a Wednesday fraud complaint from the Securities and Exchange Commission.
In a bid to change investors’ minds, the SEC says, Murstein hatched a plan: hiring media strategists to write articles boosting his company without disclosing that they were being paid by Murstein. The strategists then used fake names to place at least 50 articles about Medallion Financial on sites including Seeking Alpha, HuffPost and Crain’s New York Business from 2014 to 2017, according to the complaint.
Medallion Financial helped revolutionize the taxi industry by making risky medallion loans to low-income drivers.Murstein also pressured accountants into giving Medallion Financial a higher valuation than it deserved, the SEC said. Murstein’s company, which went public in 1996 and helped revolutionize the taxi industry by making risky medallion loans to low-income drivers, saw its shares trade north of $17 as recently as 2013.
In a statement to The Post, a spokesperson for Medallion Financial said the company plans to “vigorously defend against the SEC’s unfounded charges and are confident we will be completely vindicated.” The spokesperson did not deny that Murstein secretly paid for articles but said the conduct was in “good faith.”
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