Medallion Financial stock plunges toward 13-month low after SEC discloses fraud charges

Shares of Medallion Financial Corp. MFIN, -30.77% plummeted 56.5% toward a 13-month debased successful premarket trading Wednesday, to gait each premarket decliners, aft the Securities and Exchange Commission charged the New York-based slope holding institution and its Chief Operating Officer Andrew Murstein for engaging successful "fraudulent schemes" to boost its banal price. The SEC's ailment alleges that Medallion and Murstein engaged successful "illegal touting" of its banal by paying media strategy institution Ichabod's Cranium Inc. to spot affirmative stories astir the institution connected assorted websites, including Huffington Post, Seeking Alpha and TheStreet.com. Ichabod's Cranium and its proprietor Lawrence Meyers were besides charged by the SEC. "With Murstein's knowledge, Meyers and others created fake identities truthful their sentiment pieces would look credible to imaginable investors," the SEC said successful a statement. "The ailment further alleges that Medallion and Murstein fraudulently accrued the carrying worth of Medallion Bank (the Bank), a wholly owned subsidiary of Medallion, to offset losses relating to the taxicab medallion loans." Medallion's stock, which was connected way to unfastened astatine the lowest terms seen since November 2020, had tally up 72.5% this year, portion the SPDR S&P Reginal Banking ETF KRE, +0.30% had rallied 36.8% and the S&P 500 SPX, +0.10% had precocious 27.4%.