(HedgeCo.Net) The Securities and Exchange Commission today charged Oyster Bay, New York, and its former top elected official with defrauding investors in the town\u2019s municipal securities offerings by hiding the existence and potential financial impact of side deals with a businessman who owned and operated restaurants and concession stands at several town facilities.<\/p>\n
According to the SEC\u2019s complaint filed in U.S. District Court for the Eastern District of New York, Oyster Bay agreed several years ago to indirectly guarantee four separate private loans to the vendor totaling more than $20 million. The agreement to indirectly guarantee the debts allegedly stemmed from the concessionaire\u2019s longstanding close relationship with then-town supervisor John Venditto and other officials that involved gifts, bribes, kickbacks, and political support. <\/p>\n
The SEC\u2019s complaint alleges that Oyster Bay and Venditto deliberately concealed the indirect loan guarantees when they should have been disclosed in connection with the town\u2019s 26 securities offerings from August 2010 to December 2015. According to the complaint, this information was material to current and prospective investors due to the potential impact on the town\u2019s finances. For example, in one scenario outlined in the SEC\u2019s complaint, the town could have been required to make a termination payment of approximately $16 million (approximately 16 percent of the town\u2019s operating budget) within 60 days had the vendor defaulted on the loans. <\/p>\n
\u201cAs alleged in our complaint, Oyster Bay and its most senior elected official concealed from its municipal investors that the town had gone to great lengths and taken on financial risk in an unusual decision to assist a vendor. Investors were deprived of information they needed to understand the town\u2019s true financial condition as they made investment decisions,\u201d said Sanjay Wadhwa, Senior Associate Director of the SEC\u2019s New York Regional Office.<\/p>\n
In a parallel action, the U.S. Attorney\u2019s Office for the Eastern District of New York today filed a superseding indictment that included securities fraud charges against Venditto.<\/p>\n
The SEC\u2019s complaint charges Oyster Bay with violations of Section 17(a) of the Securities Act of 1933 and Section 10(b) of the Securities Exchange Act of 1934 and Rule 10b-5. Venditto is charged with violations of Section 17(a)(1) and (a)(3) of the Securities Act and Section 10(b) of the Exchange Act and Rule 10b-5. He also is charged with liability under Section 20(a) of the Exchange Act as a controlling person for the violations by the town, and with aiding and abetting violations.<\/p>\n","protected":false},"excerpt":{"rendered":"
(HedgeCo.Net) The Securities and Exchange Commission today charged Oyster Bay, New York, and its former top elected official with defrauding investors in the town\u2019s municipal securities offerings by hiding the existence and potential financial impact of side deals with a […]<\/p>\n","protected":false},"author":4,"featured_media":0,"comment_status":"open","ping_status":"closed","sticky":false,"template":"","format":"standard","meta":{"footnotes":""},"categories":[16,3,16048],"tags":[],"class_list":["post-61053","post","type-post","status-publish","format-standard","hentry","category-hedgeco-networks-press-releases","category-hedgeco-news","category-hedgecovest-news"],"_links":{"self":[{"href":"https:\/\/www.hedgeco.net\/news\/wp-json\/wp\/v2\/posts\/61053","targetHints":{"allow":["GET"]}}],"collection":[{"href":"https:\/\/www.hedgeco.net\/news\/wp-json\/wp\/v2\/posts"}],"about":[{"href":"https:\/\/www.hedgeco.net\/news\/wp-json\/wp\/v2\/types\/post"}],"author":[{"embeddable":true,"href":"https:\/\/www.hedgeco.net\/news\/wp-json\/wp\/v2\/users\/4"}],"replies":[{"embeddable":true,"href":"https:\/\/www.hedgeco.net\/news\/wp-json\/wp\/v2\/comments?post=61053"}],"version-history":[{"count":1,"href":"https:\/\/www.hedgeco.net\/news\/wp-json\/wp\/v2\/posts\/61053\/revisions"}],"predecessor-version":[{"id":61054,"href":"https:\/\/www.hedgeco.net\/news\/wp-json\/wp\/v2\/posts\/61053\/revisions\/61054"}],"wp:attachment":[{"href":"https:\/\/www.hedgeco.net\/news\/wp-json\/wp\/v2\/media?parent=61053"}],"wp:term":[{"taxonomy":"category","embeddable":true,"href":"https:\/\/www.hedgeco.net\/news\/wp-json\/wp\/v2\/categories?post=61053"},{"taxonomy":"post_tag","embeddable":true,"href":"https:\/\/www.hedgeco.net\/news\/wp-json\/wp\/v2\/tags?post=61053"}],"curies":[{"name":"wp","href":"https:\/\/api.w.org\/{rel}","templated":true}]}}