The town of Oyster Bay, Long Island settled SEC charges of defrauding investors in connection with municipal securities offerings.
As previously described, the SEC alleged that the town and its former supervisor John Venditto failed to make adequate disclosures related to an agreement to indirectly guarantee private loans totaling more than $20 million. The loans were made to a vendor who operated several restaurants and concessions in the town. According to the SEC, the disclosure was crucial to investors, as it revealed important information regarding the town's finances.
The town agreed to a permanent injunction against violating antifraud provisions of Securities Act Sections 17(a)(2) and (a)(3), and committed to hire an independent consultant to advise on town policies concerning disclosures for securities offerings.
The SEC's litigation against Mr. Venditto is ongoing.
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