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Medley Management and former co-CEOs to pay $10M to settle SEC charges

Medley Management (NYSE:MDLY) and its former co-CEOs, Brook B. Taube and Seth B. Taube, will collectively pay $10M in civil penalties to settle charges from the Securities and Exchange Commission that they made misrepresentations to investors and clients about its likely future growth.

The SEC alleges that since at least August 2016, in multiple public filings, including bond offering materials, Medley (MDLY) overstated its assets under management by including "committed capital" amounts from non-discretionary clients, whose agreements with the company imposed no obligation to invest with MDLY and whose investing activity through the company was minimal.

"The Taubes and Medley did not disclose that there was a risk that a significant amount of the clients’ capital would never be invested and would therefore never generate the fee income on which Medley’s financial growth depended," the SEC said.

Medley settles SEC charges over misrepresenting AUM, future growth

Medley Management and its former co-CEOs agreed to settle Securities and Exchange Commission charges that the asset manager made misrepresentations to investors and clients that created the illusion of likely future growth.

Medley and former co-CEOs Brook B. Taube and Seth B. Taube did not admit to or deny the SEC's findings in agreeing to the settlement and will collectively pay $10 million in civil penalties, the SEC announced Thursday.