Asset manager and former co-CEOs agree to pay $10 million in SEC fees

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An asset manager and his former co-CEOs have agreed to pay $10 million to settle U.S. Securities and Exchange Commission charges for making false statements to investors and clients, which created the illusion of the company’s likely future growth.

The SEC order said that in several public filings for at least
In August 2016, New York-based Medley Management and Brook B. Taube and Seth B. Taube overstated the company’s assets by including amounts of “committed capital” from clients whose agreements with Medley imposed no obligation to invest with the company and whose investment activity through Medley was minimal.

The Taubes and Medley did not disclose that there was a risk that a significant portion of the client’s capital would never be invested and therefore never generate the commission income on which Medley’s financial growth depended, the SEC said in his statement.

The Taubes and Medley consented to entry of the SEC order that found that they had committed violations of the anti-fraud provisions of 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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