On September 18, 2024, Judge Lewis Kaplan denied the majority of the motion to dismiss the SEC lawsuit against Medallion Financial Corp. and its President, Andrew Murstein. The lawsuit alleges Murstein inflated asset values, committed fraud, lied to auditors, and directed stock touting. This denial significantly increased the probability of facing financial penalties.
Further developments occurred on December 5, 2024, when co-defendant Larry Meyers reached a settlement in principle with the SEC. Subsequently, on December 20, 2024, the SEC announced that settlement agreements in principle had also been reached with Medallion Financial and Andrew Murstein. The finalization of this agreement is expected by February 25, 2025.
The company is estimated to have spent $8 million in legal fees to defend Murstein in this 3-year legal battle. Additionally, Medallion Financial updated its Compensation Recoupment Policy after October 15, 2023, removing references to 'detrimental conduct' and making it retroactive to include 2018 compensation.
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