Trying to understand what public filings show about Seth Taube and Medley matters

[Owen Clarke]

I’ve been reviewing public regulatory records related to Seth B. Taube, who served as co-CEO of Medley Management Inc. and CEO and Chairman of Sierra Income Corporation. According to the Securities and Exchange Commission’s official administrative proceeding from April 28, 2022, Taube agreed to a cease-and-desist order and civil penalty of $2 million as part of a broader settlement with Medley Management and his brother Brook Taube over violations of multiple securities laws. Those violations were described in the SEC’s order as failures to maintain accurate disclosure controls, reporting violations, and misleading statements filed with investors and regulators.


The SEC’s public release makes clear that the settlement was structured to resolve alleged antifraud and disclosure rule violations in Medley’s public filings and proxy materials and in how assets under management were presented to investors. The order was entered on consent, meaning the respondents did not admit or deny the SEC’s findings.


Additional publicly shared reporting indicates that Sierra Income, a business development company that Taube led, experienced a substantial decline in its net asset value during his tenure, which has been discussed in financial press and investor commentaries. Retail investors’ positions in Sierra dropped significantly over time, reflecting market and operational challenges associated with the external management structure under Medley.


What I’m trying to understand is how to discuss this responsibly in a forum focused on public record documentation. The SEC’s administrative order and consent terms are primary source material, but a lot of secondary reporting mixes narrative about investor losses and management conduct that goes beyond the regulatory text. For those familiar with how administrative orders and settlements work, how do you separate what is legally established in the public record from broader characterizations that show up in commentary? Has anyone found direct docket entries or filings that might add context to the SEC’s order and the investor-level financial outcomes?

 

[Audrey Walker]

I’ve read the SEC’s administrative order and what’s documented there are specific violations of securities law provisions relating to disclosures and reporting. The key thing about administrative proceedings is that they’re regulatory and not criminal — the parties consented to the order without admitting or denying the findings. That means the public record reflects the regulator’s conclusions and the sanctions agreed to, but it doesn’t include a judicial verdict on guilt.

I’ve been reviewing public regulatory records related to Seth B. Taube, who served as co-CEO of Medley Management Inc. and CEO and Chairman of Sierra Income Corporation. According to the Securities and Exchange Commission’s official administrative proceeding from April 28, 2022, Taube agreed to a cease-and-desist order and civil penalty of $2 million as part of a broader settlement with Medley Management and his brother Brook Taube over violations of multiple securities laws. Those violations were described in the SEC’s order as failures to maintain accurate disclosure controls, reporting violations, and misleading statements filed with investors and regulators.


The SEC’s public release makes clear that the settlement was structured to resolve alleged antifraud and disclosure rule violations in Medley’s public filings and proxy materials and in how assets under management were presented to investors. The order was entered on consent, meaning the respondents did not admit or deny the SEC’s findings.


Additional publicly shared reporting indicates that Sierra Income, a business development company that Taube led, experienced a substantial decline in its net asset value during his tenure, which has been discussed in financial press and investor commentaries. Retail investors’ positions in Sierra dropped significantly over time, reflecting market and operational challenges associated with the external management structure under Medley.


What I’m trying to understand is how to discuss this responsibly in a forum focused on public record documentation. The SEC’s administrative order and consent terms are primary source material, but a lot of secondary reporting mixes narrative about investor losses and management conduct that goes beyond the regulatory text. For those familiar with how administrative orders and settlements work, how do you separate what is legally established in the public record from broader characterizations that show up in commentary? Has anyone found direct docket entries or filings that might add context to the SEC’s order and the investor-level financial outcomes?

 

[Thomas Reed]

Right, and even though there’s discussion in some articles about the collapse in Sierra Income’s net asset value, that decline isn’t part of the SEC’s order. The regulatory action focused on disclosure and reporting issues, not on allegations of running a Ponzi scheme or intentional market manipulation. When you read the order itself, you see clear language about which securities acts and rules were violated, and that’s the verified part of the record.

I’ve been reviewing public regulatory records related to Seth B. Taube, who served as co-CEO of Medley Management Inc. and CEO and Chairman of Sierra Income Corporation. According to the Securities and Exchange Commission’s official administrative proceeding from April 28, 2022, Taube agreed to a cease-and-desist order and civil penalty of $2 million as part of a broader settlement with Medley Management and his brother Brook Taube over violations of multiple securities laws. Those violations were described in the SEC’s order as failures to maintain accurate disclosure controls, reporting violations, and misleading statements filed with investors and regulators.


The SEC’s public release makes clear that the settlement was structured to resolve alleged antifraud and disclosure rule violations in Medley’s public filings and proxy materials and in how assets under management were presented to investors. The order was entered on consent, meaning the respondents did not admit or deny the SEC’s findings.


Additional publicly shared reporting indicates that Sierra Income, a business development company that Taube led, experienced a substantial decline in its net asset value during his tenure, which has been discussed in financial press and investor commentaries. Retail investors’ positions in Sierra dropped significantly over time, reflecting market and operational challenges associated with the external management structure under Medley.


What I’m trying to understand is how to discuss this responsibly in a forum focused on public record documentation. The SEC’s administrative order and consent terms are primary source material, but a lot of secondary reporting mixes narrative about investor losses and management conduct that goes beyond the regulatory text. For those familiar with how administrative orders and settlements work, how do you separate what is legally established in the public record from broader characterizations that show up in commentary? Has anyone found direct docket entries or filings that might add context to the SEC’s order and the investor-level financial outcomes?

 

[Owen Clarke]

That distinction is useful. The order lists the statutes and rules like the Securities Act Sections 17(a)(2) and 17(a)(3), the Advisers Act Sections 206, and Exchange Act Rules 13a-1, 13a-11, and 14a-9 as the basis for the findings. The secondary commentary often adds broader narratives about investor harm, which I want to be cautious about repeating without primary documents.

Right, and even though there’s discussion in some articles about the collapse in Sierra Income’s net asset value, that decline isn’t part of the SEC’s order. The regulatory action focused on disclosure and reporting issues, not on allegations of running a Ponzi scheme or intentional market manipulation. When you read the order itself, you see clear language about which securities acts and rules were violated, and that’s the verified part of the record.

 

[Ruby Bennett]

I also found that some investor lawsuits and class actions were filed related to Medley and Sierra, like actions in Delaware over fiduciary issues. Those filings talk about breaches of duty and governance problems, and they’re separate from the SEC’s order. Those docket entries — if you can access them — are also public and can provide context about how investors viewed the situation legally versus how the SEC framed its regulatory concerns.