NYC taxi lender fined $4M over ‘fake news’ plants
A New York Financier and His Firm Fined $4 Million for Planting Fake News
A New York financier and his publicly traded firm that provided loans to taxi drivers have been fined $4 million for orchestrating a scheme involving fake news articles to artificially inflate the company’s stock price.
Medallion Financial Corp., which suffered losses due to the emergence of ride-sharing apps like Uber and Lyft, has been ordered to pay $3 million as part of a settlement following a ruling by Judge Lewis A. Kaplan of the US Southern District of New York.
The president of Medallion, Andrew Murstein, known for hiring Nicki Minaj to perform at his son’s bar mitzvah, will also have to pay $1 million in fines as per a Securities and Exchange Commission case.
The SEC complaint, filed in December 2021 under Chair Gary Gensler, accused Murstein and Medallion Financial of misleading investors by withholding crucial information about Medallion Bank’s fair value.
According to the complaint, Murstein engaged media strategists to publish around 50 fake news stories from 2014 to 2017 on platforms like JS and Crain’s New York Business. The stories portrayed fake investors as bullish on Medallion stock without disclosing the payments made to the authors.
Furthermore, the complaint revealed that Murstein altered many of the stories personally to make them appear genuine. The scheme resulted in an inflated valuation of Medallion’s banking unit.
As part of the settlement, all defendants neither admit nor deny the allegations, as confirmed by a Medallion spokesperson.
The company’s stock closed at $9.50 following the settlement. Medallion Financial, originally founded by Murstein’s taxi-driving father, aimed to provide loans to drivers seeking NYC taxi permits. The company has since transitioned towards traditional banking services.
