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An NYC taxi-medallion company plunges 59% after the SEC alleges illegal stock promotion


  • A NYC-based taxi medallion company plunged as much as 59% after the SEC alleged the company engaged in illegal stock promotion.
  • According to the SEC, Medallion Financial paid a media company to post positive investment articles about the company from 2014 through 2017.
  • Medallion Financial stock has been hammered over the years due to ride-hailing disruption by Uber and Lyft.
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Shares of Medallion Financial, a NYC-based taxi-medallion lending company, plunged as much as 59% after the SEC alleged that the company and its president and chief operating officer, Andrew Murstein, engaged in illegal stock promotion activities. 

According to the SEC complaint, Medallion hired a media strategy company to publish more than 50 positive articles and hundreds of positive comments about the company on various websites, including on investment-themed platforms SeekingAlpha and

From late 2014 through 2017, Medallion allegedly engaged with California-based media company Ichabod’s Cranium to create fake identities so their opinion articles would appear to be credible to potential investors.

“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 New York Regional Office Director Richard Best said.

Taxi medallions are permits that allow cab drivers to operate in cities. They are transferable, and their constrained supply once made them attractive investments. But the arrival of disruptive ride-hailing companies like Uber and Lyft changed that.

Medallion sought to reverse a precipitous drop in its share price, which has tumbled 43% since 2014 while the S&P 500 is up more than 160%. 

Separately, the SEC alleged that the company fraudulently boosted the carrying value of its wholly owned subsidiary, Medallion Bank, to help offset losses in its taxicab medallion loans. After Medallion’s appraisal firm refused to increase its valuation of the company following pressure from Murstein, the company hired a new firm to provide a increased valuation of the bank. 

Altogether, the SEC is charging Medallion and Murstein with violating antifraud, books and records, anti-touting, and internal controls provisions of federal securities laws. Murstein is additionally being charged with making false statements to Medallion’s auditor. Finally, Ichabod’s Cranium and its owner, Lawrence Meyers, are being charged with touting and fraud. 

The SEC is seeking civil penalties, permanent injunctions, and disgorgement of ill-gotten gains plus pre-judgement interest. Additionally, the agency is seeking to ban Murstein from holding officer and director positions. 

In a statement, Medallion disputed the charges, saying it will “vigorously defend against the SEC’s unfounded charges and are confident we will be completely vindicated.” Medallion’s stock pared its losses to just under 30% in afternoon trades. 

MFIN stock chart

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