SEC Probe Turns Attention to Alabama Official's Ties

NEW YORK -- The Securities and Exchange Commission is investigating the mayor of Birmingham, Ala., to determine if he steered underwriting business to a local investment-banking firm in exchange for payments while he led the committee that oversaw the finances of Jefferson County, The Wall Street Journal reported Tuesday.

The SEC said it is seeking information related to $5 billion raised by Jefferson County, Ala., through bond offerings and derivative contracts, the same types of instruments that are at the heart of the county's current financial distress. The Montgomery, Ala., investment bank, Blount Parrish & Co., underwrote nearly $2 billion of the securities offerings, the SEC said, according to the paper.

The fraud investigation became public in court documents filed in U.S. District Court in Miami as the SEC sought to compel the testimony of Larry Langford, the current mayor who once was in charge of Jefferson County's finances, and William Blount, the chairman of Blount Parrish. Both men refused to answer questions at depositions in December, but a federal judge in Miami ordered them to submit to an interview, which they did last month by telephone. The SEC also said it has sought information from witnesses in six other states, the paper reported.

Calls to the mayor's office and Langford's attorney weren't returned, nor were messages that were left for Blount and his attorney, the paper reported.

-- NYSSCPA.org News Staff

Posted on 3/11/08