Oyster Bay Official Charged with Defrauding Investors
The United States Attorney’s Office for the Eastern District of New York and the Securities and Exchange Commission (SEC) have charged Oyster Bay, New York and its former town supervisor John Venditto with defrauding investors in connection with the town’s municipal securities offerings.
According to the SEC’s complaint, Oyster Bay and Venditto allegedly concealed side deals with a businessman close to Venditto that could have had devastating financial impacts to the town’s finances.
If one of the $16 million loans went into default, it could have devastated the town’s finances.
Oyster Bay and Venditto allegedly purposefully failed to disclose the fact that Oyster Bay agreed to indirectly guarantee four different private loans totaling more than $20 million for a businessman with close ties to Venditto. The SEC claims that this information could have had a potential impact on the town’s finances and should have been disclosed to the investing public.
One scenario provided in the SEC’s complaint to explain the potential financial impact was the possibility that if one of the $16 million loans went into default, the town would be responsible for the debt which was due and payable within 60 days. This would be a significant strain on the town’s finances because a $16 million debt is equal to 16% of the town’s operating budget.
If you have suffered significant financial losses as a result of investing in municipal securities offerings, the attorneys of the Business Trial Group can help. Backed by the largest contingency-fee law firm in the country, our clients pay no upfront fees or retainers, and we only receive a fee if we successfully recover compensation on your behalf.
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