Law and legal issues

BRADENTON, Fla. — The South Florida Water Management District yesterday unanimously extended a key contract deadline for its controversial plan to purchase land owned by U.S. Sugar Corp.

WASHINGTON — A second former employee of CDR Financial Products Inc., Matthew Adam Rothman, has pleaded guilty to participating in bid-rigging and fraud conspiracies with other firms that provided investment agreements to states and localities, the Justice Department announced late Thursday.

SAN FRANCISCO — One of the Nevada local improvement districts that sold land-secured bonds to finance infrastructure at the troubled Lake Las Vegas development made an unscheduled draw on its reserve fund to pay debt service this month, according to a disclosure report filed with the Municipal Securities Rulemaking Board.

BRADENTON, Fla. — Attorneys for Larry Langford Tuesday filed a notice with the 11th U.S. Circuit Court of Appeals in Atlanta stating they intend to appeal his conviction.

WASHINGTON — The Municipal Securities Rulemaking Board today is expected to file long-awaited rule changes with the Securities and Exchange Commission that would implement the final phase of its transparency system for auction-rate securities and variable-rate demand obligations.

BRADENTON, Fla. — The Securities and Exchange Commission sent the Florida State Board of Administration a one-paragraph letter last week stating that the agency will not recommend enforcement action regarding the meltdown of what was one of the largest local government investment pools in the country.

The mayor of Pontiac, which is in its second year of state-controlled emergency financial management, said he might file a lawsuit challenging the authority of the city’s new financial manager, according to the Detroit Free Press.

CHICAGO — Detroit will enter the market Thursday with $250 million of state aid limited-tax general obligation bonds that the city will use to erase a chunk of its accumulated deficit.

The U.S. budget deficit is soaring into “unfamiliar territory” and could reach a “tipping point” where investors no longer want to buy Treasury securities, Congressional Budget Office director Douglas W. Elmendorf warned at a conference here yesterday.

A Securities and Exchange Commissioner, who caused a furor among issuers last fall by calling for the repeal of the Tower Amendment and securities law exemptions for municipal securities issues, has begun meeting with them to get their views on what actions the SEC should take.

ORLANDO, Fla. — Alabama federal Judge Scott Coogler Friday sentenced former Jefferson County Commission president Larry Langford to 15 years in federal prison for his role in a long-running play-to-play scheme centering around the county’s now-failed $3.2 billion of sewer warrants and swaps.

The Securities and Exchange Commission announced Friday that it has reached a $1.95 million settlement with First Allied Securities Inc. for failing to supervise one of its former brokers who engaged in unauthorized, fraudulent trading in the accounts of two Florida municipalities.

California Gov. Arnold Schwarzenegger won a round this week in a legal dispute over his line-item veto authority.

DALLAS — UBS Securities will repurchase up to $200 million of auction-rate securities from investors across the country not covered in investment bank’s initial agreement with state and federal regulators, according to the Texas State Securities Board.

BRADENTON, Fla. — Federal prosecutors in Alabama Wednesday recommended that former Jefferson County Commission president Larry Langford be sentenced to a minimum of 24 years and four months and a maximum of 30 years and five months in prison.

The Securities and Exchange Commission and the Internal Revenue Service announced yesterday they have agreed to work together more closely to monitor and regulate municipal bonds — another signal that federal regulators have elevated the priority of the muni market.

WASHINGTON — Supreme Court justices yesterday signaled they have concerns about the “honest-services fraud” statute used to convict former Enron Corp. chief executive officer Jeffrey Skilling, but were unclear if they would grant his request that they declare it unconstitutionally broad and vague.

Two groups of tax attorneys last week urged the Treasury Department to modify its proposed regulations on bond-financed solid-waste disposal facilities to make sure they would cover all legitimate waste facilities.

An ethics report finding that House Ways and Means Committee chairman Charles Rangel violated congressional gift rules is the latest in a string of bad news for the embattled New York Democrat, but it remains unclear whether this friend of the muni market will eventually lose his powerful position.

BRADENTON, Fla. — A federal judge in Alabama Friday sentenced Montgomery bond dealer Bill Blount to four years and four months in prison and lobbyist Al LaPierre to four years in prison for their pay-to-play roles in the refinancing of Jefferson County’s $3.2 billion of now-failed sewer warrants.