It’s no secret at this point that Uber and Lyft’s arrival to the ride-hailing scene in the early 2010s dealt a huge blow to the traditional cab industry, but charges filed this week by the Securities and Exchange Commission (SEC) show just how far one firm, New York’s Medallion Financial, was willing to go to stay relevant.
In its filing, the SEC accused the company, and CEO Andrew Murstein, of partnering with a California media strategy company called Ichabod’s Cranium to place fabricated positive stories in major publications using fake identifies in a desperate attempt to boost the company’s stock price between 2014-2017. Those stories allegedly found their way onto prominent sites like The Huffington Post, SeekingAlpha, and TheStreet.com.
“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 of Medallion’s stock,” SEC Director of the New York Regional Office Richard Best said in a statement.
In addition to paying for articles, the SEC accused Medallion of pressuring investment banks to inflate Medallion Financial’s value. “Companies also cannot shop for higher valuations when there is no evidence to support them,” Best added. Medallion’s stock took a 56% nosedive in premarket trading following news of the charges.
Both Murstein and Medallion are being charged with violating the antifraud, books and records, internal controls,...
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