13 Best & Worst Broker-Dealers: Q3 Earnings, 2017
5 Annuity Business Beauty Secrets
3 Economic Scenarios for Investors to Watch in Next 5 Years
The Securities and Exchange Commission charged Oyster Bay, New York, and its former top elected official with defrauding investors in the town’s 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.
According to the SEC’s complaint, Oyster Bay agreed several years ago to indirectly guarantee four separate private loans to the concession stand vendor totaling more than $20 million. The agreement to indirectly guarantee the debts allegedly stemmed from the concessionaire’s longstanding close relationship with then-town supervisor John Venditto and other officials that involved gifts, bribes, kickbacks and political support.
The SEC’s complaint alleges that Oyster Bay and Venditto deliberately concealed the indirect loan guarantees when they should have been disclosed in connection with the town’s 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’s finances. For example, in one scenario outlined in the SEC’s complaint, the town could have been required to make a termination payment of approximately $16 million – approximately 16% of the town’s operating budget – within 60 days had the vendor defaulted on the loans.
”As 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,” Sanjay Wadhwa, senior associate director of the SEC’s New York Regional Office, said in a statement. “Investors were deprived of information they needed to understand the town’s true financial condition as they made investment decisions.”
In a parallel action, the U.S. Attorney’s Office for the Eastern District of New York today filed a superseding indictment that included securities fraud charges against Venditto.
— Related on ThinkAdvisor:
You are signed up!
ThinkAdvisor’s TechCenter is an educational resource designed to give you a competitive edge by keeping you abreast of new tech innovations and need-to-know information that can be applied to your business. padding: 0px;width: inherit; ETF & Smart Beta Research
A survey of advisors nationwide reveals how the use of ETFs is expanding and what factors are likely to further support this trend. padding: 0px 81px;width: inherit; Retirement Wire
Your resource for news, research and analysis to help you deliver more effective outcomes to your clients. width:300px!important;max-height:36px; Financial Education Resource Center
ThinkAdvisor and the College for Financial Planning have partnered to bring you a series of helpful educational tools that you can use to take your career to the next level. Resources How Factors Influence Equity and Fixed-Income Returns
Looking at securities through the lens of factors
New advisor survey results spotlight disconnects.
Many of the old stereotypes of emerging markets no longer fit.
Join this webcast to see how Trisha Qualy, Director of Wealth Management at AdvisorNet Financial, took client assets from $100 million to $1.3 billion in…
Join this complimentary webcast to learn innovative strategies that have proven effective in containing rising health costs.
Join this conversation as a panel of experts provides tips and best practices to optimize your tech resources for business growth.