SEC charges Birmingham mayor, Blount Parrish with undisclosed payment scheme

By Laura Lutz

Des Moines, April 30 - The Securities and Exchange Commission said it filed a civil action against Larry Langford, mayor of Birmingham, Ala.; William Blount; Blount Parrish & Co., Inc.; and Albert LaPierre in connection with municipal bond offerings and security-based swap agreements in 2003 and 2004.

This case is the SEC's first enforcement action involving security-based swap agreements, according to a news release from the SEC.

The SEC charged that while Langford was president of the Jefferson County, Ala., County Commission, he accepted more than $156,000 of undisclosed cash and benefits from William Blount, the chairman of Blount Parrish.

In exchange, the SEC claimed, Langford selected Blount Parrish to participate in every Jefferson County municipal bond offering and security-based swap agreement during 2003 and 2004, earning Blount Parrish more than $6.7 million in fees.

The SEC also alleged that Langford and Blount concealed the scheme by using their friend Albert LaPierre, a registered political lobbyist in Alabama, as a conduit.

Blount Parrish participated as an underwriter on three of the five municipal bond offerings during that period, the SEC said, and acted as a remarketing agent on a fourth offering.

Langford signed official statements on behalf of all Jefferson County for all five offerings. Those statements were intended to disclose material information to investors but did not disclose Blount's payments to Langford, the SEC said.

The SEC further alleged that Langford directed that Blount Parrish be included in four security-based swap transactions.

The letter agreements that Langford signed for the swap transactions also did not disclose Blount's payments to him, the SEC said.

Langford, Blount and Blount Parrish are charged with violations of section 17(a) of the Securities Act of 1933 and section 10(b) of the Securities Exchange Act of 1934 and rule 10b-5 thereunder. Blount and Blount Parrish are charged with violations of section 15B(c)(1) of the 1934 Exchange Act and Municipal Securities Rulemaking Board rules G-17 and G-20. LaPierre is charged with aiding and abetting the violations of Blount and Blount Parrish.

For each defendant, the complaint is seeking permanent injunctions, disgorgement with prejudgment interest and a civil money penalty.

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