Brook Taube Wells Notice: SEC Charges Against Medley Management

Brook Taube Wells Notice

In a recent development that sent shockwaves through the financial industry, the Securities and Exchange Commission (SEC) has charged publicly-traded asset manager Medley Management and its former co-CEOs, Brook B. Taube and Seth B. Taube, with making misrepresentations to investors and clients. This article delves into the intricacies of the case, shedding light on the allegations, implications, and lessons to be learned from this high-profile enforcement action.


The case revolves around allegations of misleading investors and clients by creating the illusion of Medley’s likely future growth through misrepresentations in public filings and financial projections. The SEC’s charges highlight the importance of transparency and accuracy in financial reporting, especially in the realm of asset management where trust and integrity are paramount.

Background of Medley Management

Medley Management, founded in [year], has established itself as a prominent player in the asset management industry. With a focus on [specific area], the company has garnered attention for its innovative strategies and client-centric approach. Over the years, Medley has built a reputation for [positive attribute], earning the trust of investors and clients alike.

Introduction of Brook B. Taube and Seth B. Taube

Brook B. Taube and Seth B. Taube, former co-CEOs of Medley Management, are seasoned veterans in the financial sector. With decades of combined experience, they have played pivotal roles in steering Medley towards success. Their leadership and expertise have been instrumental in shaping the company’s trajectory and positioning it as a leading asset manager.

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SEC Charges and Allegations

The SEC’s investigation uncovered a series of troubling practices at Medley Management, leading to a litany of charges against the company and its former co-CEOs. Among the allegations are instances of [specific misconduct], which call into question the integrity of Medley’s operations and disclosures.

Overstating Assets Under Management

One of the primary accusations leveled against Medley Management is the overstatement of its assets under management (AUM). By including “committed capital” amounts from non-discretionary clients, Medley painted a misleading picture of its financial health and growth prospects. This practice, while not inherently illegal, has raised concerns about transparency and accountability.

Failure to Disclose Risks

In addition to overstating AUM, Medley Management failed to adequately disclose the risks associated with its financial strategies. Investors and clients were left in the dark about the possibility that a significant portion of their capital might never be invested, thus jeopardizing the fee income on which Medley’s growth depended. This lack of transparency underscores the importance of thorough risk disclosure in financial reporting.

Misleading Projections and Recommendations

The SEC’s order also highlights instances where the Taube brothers used misleading projections of Medley’s future growth to recommend a merger to advisory clients. These projections, which lacked a reasonable basis, were incorporated into proxy materials, influencing investor decisions and ultimately benefiting the Taubes financially. Such conduct is not only unethical but also undermines investor trust and market integrity.

SEC Enforcement and Settlement

In response to the SEC’s charges, Medley Management and the Taube brothers have agreed to settle the case. The terms of the settlement include [details of the settlement], with the respondents collectively paying a $10 million civil penalty. This enforcement action sends a clear message that regulatory authorities will not tolerate misconduct in the financial industry.

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Impact on Investors and Clients

The repercussions of the SEC charges and settlement are far-reaching, affecting not only Medley Management and its former executives but also investors and clients who trusted the company with their assets. The fallout from this case serves as a stark reminder of the risks inherent in the financial markets and the importance of due diligence when selecting investment partners.

Lessons Learned and Regulatory Compliance

As the dust settles on the Medley Management case, there are valuable lessons to be learned for companies and executives across the financial sector. Chief among these is the imperative of regulatory compliance and transparency. By adhering to strict standards of conduct and disclosure, companies can mitigate the risk of regulatory scrutiny and build trust with investors and clients.


The SEC’s charges against Medley Management and its former co-CEOs underscore the critical importance of integrity and transparency in the financial industry. As investors and regulators demand greater accountability, companies must prioritize ethical conduct and robust compliance programs. By doing so, they can uphold the trust and confidence of stakeholders and safeguard the integrity of the markets.