A complaint filed Wednesday in a Manhattan court has led the Securities and Exchange Commission to charge Medallion Financial Corp. and its COO Andrew Murstein with violating antifraud, books and records, internal controls and anti-touting previsions of federal securities laws.

Shares of Medallion (MFIN) plunged in Wednesday trading.

The SEC has also charged Murstein with making false statements to Medallion’s auditor concerning a scheme to pay for media coverage to inflate the company's credibility. Medallion Financial is a publicly traded finance company that has leading positions in niche markets like taxi medallion lending.

Medallion, a Delaware company headquartered in New York City, engaged in the efforts to reverse its plummeting stock price. Shares of Medallion were falling due to the growth of ridesharing companies Uber and Lyft.

In two separate alleged schemes, Medallion sought to inflate its stock price disingenuously by hiring California-based media strategies company Ichachod’s Cranium, which was also charged with fraud by the SEC in connection to the complaint.

Medallion paid Ichabod to place positive stories about the company on various websites like the Huffington Post, Seeking Alpha and TheStreet.com, the complaint claims, and also created fake identities for opinion pieces written about the company that would seem real to investors.

The complaint also alleges that Medallion and Murstein fraudulently increased the carrying value of Medallion Bank, a subsidiary of Medallion, to offset losses related to the competition with Uber and Lyft. A valuation firm was fired for refusing to provide an inflated valuation of Medallion Bank.

“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. Companies also cannot shop for higher valuations when there is no evidence to support them,” said Richard Best, director of the New York regional office of the SEC.

The SEC is seeking permanent injunctions, disgorgement plus prejudgment interest, and civil penalties related to the complaint. For Murstein, the SEC is seeking an officer-and-direct bar.

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