Medallion Financial Corp., a New York financier and publicly traded firm known for lending to taxi drivers, has been fined $4 million amid allegations of manipulating its stock price through fake news articles.
The settlement imposes a $3 million penalty on the firm, with an additional $1 million penalty levied against Medallion’s president, Andrew Murstein.
This ruling came from Judge Lewis A. Kaplan of the US Southern District of New York, who determined that the Securities and Exchange Commission (SEC) had sufficient grounds for the complaint against both Medallion and Murstein.
The SEC’s investigation revealed that between 2014 and 2017, the firm engaged in a scheme to plant misleading articles on various online platforms to artificially inflate its stock price.
Murstein, who gained media attention in 2015 for hiring Nicki Minaj to perform at his son’s bar mitzvah, allegedly orchestrated a plan recruiting media strategists to generate at least 50 fake stories.
These articles appeared on reputable sites such as HuffPost and Crain’s New York Business, making it seem as though they were authentic endorsements from investors who were optimistic about Medallion stock.
However, according to the SEC’s complaint, the authors of these articles were compensated for their work, and many of the stories had edits directly made by Murstein.
This deliberate effort to mislead investors included not disclosing information regarding the fair value of Medallion Bank.
Judge Kaplan’s opinion highlighted that the SEC had robust allegations outlining how Murstein and Medallion Financial misled their investors.
As the popularity of ride-sharing apps like Uber and Lyft surged, the value of taxi medallions plummeted, adversely affecting Medallion’s financial standing.
Interestingly, the SEC complaint pointed out that Murstein attempted to ignore the deteriorating state of his medallion portfolio when a valuation firm refused to validate his amplified estimate of the company’s value.
According to the SEC, the banking unit’s estimated value surged to $280 million by the end of 2016, a dramatic jump from $166 million just two quarters before, despite plummeting medallion prices.
In addition to Murstein’s penalties, California PR agent Lawrence Meyers, another key player in this scheme, faces a $100,000 fine connected to the allegations.
It is noteworthy that all defendants in this settlement neither admit nor deny the allegations as part of their agreement with the SEC.
A spokesperson for Medallion stated that reaching this settlement allows the company to focus on growth without the burdens of ongoing litigation against them.
The spokesperson emphasized that this resolution is in the best interest of the firm and its shareholders.
News surrounding the settlement first emerged from American Banker, shedding light on the complicated background of Medallion Financial, which has been the subject of scrutiny since the emergence of ride-sharing services.
From 2002 to 2014, Murstein and his father, Leon, reportedly amassed over $42 million, a time when Medallion flourished prior to the entry of ride-share competitors into the market.
During this period, Medallion Financial also invested in professional lacrosse and NASCAR teams.
In light of this, sources expressed concerns that the SEC might be lenient on the firm due to changes within the regulatory framework and potential staffing shortages.
Comments from Rebecca Fike, a former SEC enforcement attorney, suggested that there may be intentions under the newly appointed SEC administration to expedite resolutions and impose lower civil penalties in cases where corporate benefits from fraudulent actions cannot be demonstrated.
As of Wednesday, Medallion’s stock price stood at $9.50, reflecting the ongoing challenges the company faces.
In New York City, taxi medallions must be linked to cabs, with a limited number of 13,587 medallions legally available.
There was a time when the price for a coveted medallion skyrocketed to $1 million under the administration of former Mayor Michael Bloomberg, but with the advent of app-based ride services, values have sharply declined, leaving drivers burdened by significant debt.
Following years of protests from drivers impacted by the shift in the taxi industry, former Mayor Bill de Blasio introduced a plan in November 2021 to cap medallion loans at $170,000 with interest rates set to 5%.
In response to these changes and industry shifts, Medallion has embarked on transitioning toward more conventional consumer and commercial banking services in recent years.
image source from：https://nypost.com/2025/06/11/business/nyc-taxi-lender-fined-4m-over-fake-news-plants/
