This week, the Securities and Exchange Commission charged a former town attorney and deputy supervisor with defrauding investors in the Town’s municipal securities offerings. Leonard Genova of Oyster Bay, New York was accused of hiding the existence and potential financial impact of side deals with a business who owned and operated restaurants and concession stands at numerous town facilities. Oyster Bay and former town supervisor, John Venditto, was charged by the SEC in November of 2017.
The complaint filed against Genova alleges that Oyster Bay agreed to indirectly guarantee four separate loans to the vendor with the total being more than $20 million. The SEC suggests that Genova concealed the indirect loan guarantees when they should have been disclosed in relation with the Town’s 26 securities offerings from August of 2010 to December of 2015. The complaint suggests that the information was material to current and prospective investors, due to the potential impact on the finances of the town.
Genova has agreed to settle the case, while agreeing to permanent injunctions against violating the charged securities laws or participating in any offerings of municipal securities. The settlement is currently subject to approval by the court. Additional details have been made available here.