We tend to spend a lot of time in looking for a grand purpose, but at their core, our lives are enormously about separating right from wrong. Unfortunately, we don’t always do a great job in the said regard. Now, at times, this failure appears more as a genuine lapse, but there have been enough occasions where the misstep on our part was rather deliberate. The consequences to emerge from the latter one, as you can guess, aren’t essentially productive. In fact, if we care to dig deeper, we’ll see that some of these situations have proven rather destructive. Hence, to mitigate the risk brought into the world play by such activities, we have set up various regulatory bodies across the board. The idea would like a charm, as suddenly we had a more organized world in front of us. It’s not to say, however, that there no cracks whatsoever within the picture. There were actually some big ones, and they took an even worse look once technology turned up on the scene. While technology was helping every other sector in a significant way, the creation’s entry in the regulatory industry was somewhat volatile. Though, after some severe damage, the wheels will finally learn to move in the right direction. The indicated change in power dynamics will go on to show up on the back of many powerful regulatory decisions, with the most recent one delivered by SEC.
US Securities and Exchange Commission has officially deemed Medallion Financial Corp. and its president, Andrew Murstein, guilty of fraud and illegal touting. According to SEC, in a bid to give better competition to ride-hailing services such as Uber and Lyft, Medallion tried inflating its stock price through illegal touting. The commission reached this conclusion following an extensive investigation, which revealed that Andrew Murstein was paying a California-based media strategist to anonymously promote Medallion on popular websites, including Huffington Post, Seeking Alpha, TheStreet.com and Crain’s New York Business. Apart from it, he also unlawfully tried and inflated the organization’s banking unit so to offset all loan losses.
“Murstein allegedly paid for more than 50 articles and hundreds of positive comments, which were really paid advertisements,” said Richard Best, director of the SEC’s New York office. “Companies also cannot shop for higher valuations when there is no evidence to support them.”
The touting reportedly stretched through the time period between 2014 and 2017. Talking about ripple effects of SEC’s announcement, Medallion’s shares saw their value slashed by a whopping 45.3%.