BIRMINGHAM, Ala., March 11 (UPI) -- The mayor of Birmingham, Ala., is being investigated to determine if he gave favors to a local investment banking firm, the U.S. securities watchdog said.
The Securities and Exchange Commission said it is looking for information related to $5 billion Jefferson County, Ala., raised through bond offerings and derivative contracts -- the same investment instruments causing the county's current financial distress, The Wall Street Journal reported Tuesday. Blount Parrish & Co., an investment bank in Montgomery, Ala., underwrote nearly $2 billion of the offerings, the SEC said.
The fraud investigation is outlined in court documents filed in U.S. District Court in Miami. The SEC sought to compel testimony from Larry Langford, the current Birmingham mayor who once handled Jefferson County's finances, and William Blount, chairman of Blount Parrish.
The SEC is investigating whether individuals committed fraud in both offering and selling bonds and derivatives, and whether misleading statements about "improper payments made in exchange for municipal securities business" were made, the Journal reported.