Possibility of Criminal Indictment Looms for Langford; The Civil Suit Against Him Likely History-Mak

A former attorney for the Securities and Exchange Commission says it is still possible a criminal indictment against Mayor Larry Langford could be on the way. The SEC can't bring criminal charges --- only civil ones. The Department of Justice must bring a criminal indictment. They've been investigating Langford's case along with the SEC, who filed a civil suit against Langford in April 2008. Ken Simon of Christian & Small is a former attorney for the SEC. He says in a case like this, it would be normal to see a criminal indictment come down anytime between now and the next six months.

The Department of Justice will likely need more time than the SEC to build its case against Birmingham Mayor Larry Langford. That's because the SEC's civil suit is easier to prove than a criminal indictment from the DOJ.

"You have a burden of proof that's not as great as your burden of proof is in a criminal case," explains Simon.

The SEC and the DOJ can not work in tandem on any fraud cases. They must each conduct their own investigations in order to protect citizens' Fifth Amendment rights.

It remains to be seen whether the DOJ will bring criminal charges against Langford. Meanwhile, the SEC likely has a tough legal fight to go with its civil case against Langford: SEC lawyers must now prove they have jurisdiction to bring this civil suit:

"There has never been a case brought by the SEC involving interest rate swaps," says Simon.

Usually the Commodity Futures Trading Commission monitors the type of swap transactions in the case against Langford - not the SEC, which is why Langford is now charging the SEC can't legally bring this civil case against him. Now its up to a federal judge to decide.

"It's going to be a very deliberative process involving briefs, motions and counter motions," predicts Simon.

Simon predicts this case will get national attention: if the presiding judge rules the SEC is allowed to bring civil charges against Langford - it will be precedent setting for the entire country, bolstering the SEC's power at a time when rate swapping has become popular.

"The SEC as an institution - I can tell you this from my experience - will not bring a case it thinks is a loser," says Simon.

Simon says he's learned never to predict what a federal judge will decide. But he says if he had to ballpark how long it will take the judge to rule on the SEC's civil case against Langford --- he would guess she'd have a decision in about six months.