The U.S. Securities and Exchange Commission has notified Oyster Bay officials that it could seek monetary penalties against the town over how it reported disputed loan guarantees to the financial markets.

SEC staff notified the town last month that they would recommend to agency commissioners that a civil enforcement action be brought for alleged “misstatements and omissions” about the loan guarantees in its borrowing prospectuses since 2010, according to town financial documents. An enforcement action could mean filing a federal lawsuit against the town or holding proceedings before an SEC administrative judge.

“We received a call on June 22, that ... the investigators of the SEC were prepared to recommend civil enforcement,” Town Attorney Joseph Nocella said Thursday. The call was made to the town’s outside legal firm, Manhattan-based Quinn Emanuel Urquhart & Sullivan LLP, which is representing Oyster Bay in legal issues related to indicted former concessionaire Harendra Singh, Nocella said.

“We still hope to persuade the SEC that there were no violations or failures to disclose,” Nocella said.

The SEC did not specify a dollar amount for penalties, and could also seek to impose controls over the town’s disclosure practices, according to town documents.

SEC spokeswoman Judy Burns declined to comment Thursday.

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At issue is how the town disclosed disputed guarantees on about $20 million of loans to Singh companies that had contracts with the town as well as a $1.5 million indirect guarantee in 2010 that was not disputed. The loans were supposed to be used for capital improvements at town facilities, including the golf course, Tobay Beach and Tappen Beach.

The SEC’s notice was disclosed in Oyster Bay’s borrowing prospectus dated June 23. Among the allegations is that since 2015 the town “misstated” circumstances around the loan guarantees “by implying that the former Town Attorney and former Supervisor had been unaware of their content and existence.”

Town officials have said the disputed guarantees were entered into without the knowledge of former Town Attorney Leonard Genova or former Supervisor John Venditto and are invalid.

Federal prosecutors last year charged Venditto with accepting bribes and kickbacks from Singh for causing the town to enter into those guarantees. Venditto has pleaded not guilty. Genova on Thursday declined to comment on the SEC allegations.

The town board on Tuesday voted to hire Manhattan-based Morvillo Abramowitz Grand Iason & Anello PC to represent it in the SEC matters. The town will pay the firm $832.50 an hour.

SEC officials started seeking information from Oyster Bay about the loan guarantees in October 2015, Newsday has previously reported.

Jessica Nall, an attorney at San Francisco-based Farella Braun + Martel LLP who specializes in SEC matters, said what typically happens in cases like Oyster Bay’s is the SEC will make a settlement offer in lieu of filing a lawsuit. Penalties in such cases are “almost always in the hundreds of thousands of dollars or millions, even in smaller cases just because these are pretty serious violations,” Nall said.

Settlements can take years to resolve, she said.

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The town board on Tuesday also approved $504,777 for work already completed by Quinn Emanuel for Singh-related legal work. With the legal fees approved Tuesday, the town has paid Quinn Emanuel more than $1.6 million since 2015 in the matter.