Asset manager, former co-CEOs agree to pay $10M in SEC charges
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An asset manager and its former co-CEOs have agreed to pay $10 million to settle U.S. Securities and Exchange Commission charges that they made misrepresentations to investors and clients that created the illusion of the company’s likely future growth.
The SEC order said that in multiple public filings since at least
August 2016, New York-based Medley Management and Brook B. Taube and Seth B. Taube overstated the company’s assets by including “committed capital” amounts from clients whose agreements with Medley imposed no obligation to invest with the company and whose investing activity through Medley was minimal.
The Taubes and Medley did not disclose there was a risk that a significant amount of the client’s capital would never be invested and would therefore never generate the fee income on which Medley’s financial growth depended, the SEC said in its statement.
The Taubes and Medley consented to the entry of the SEC’s order that found they had committed violations of the antifraud provisions of the federal securities law, among other violations.
They agreed to pay the $10 million without admitting to denying the SEC’s findings.
The company could not be reached for comment.
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