A year and a half ago, Texas Attorney General Ken Paxton was arrested and charged with three counts of felony securities fraud violations, namely that he duped investors prior to being elected AG.
In 2015 we blogged:
Earlier, a grand jury handed down an indictment addressing Paxton’s July 2011 efforts to sell stocks on behalf of a McKinney, Texas-based corporation while he was still a member of the Texas House of Representatives.Paxton followed in the footsteps of fellow embattled Texas politicians Tom DeLay and Rick Perry by putting on a confident smirk for his mugshot. According to local media sources, however, Paxton avoided the press after he was booked. (I don’t blame him—the Texas Democratic Party organized a rally outside the building demanding he resign on the spot.)
Today, a federal judge dismissed the civil charges, and with prejudice.
The WSJ reports:
A federal judge has dismissed civil claims that Texas Attorney General Ken Paxton defrauded investors by recruiting them to invest in a technology company without disclosing he was being compensated to promote the company’s stock.U.S. District Judge Amos Mazzant dealt the Securities and Exchange Commission a defeat in an order released Thursday. Judge Mazzant found Mr. Paxton didn’t have a legal duty to tell investors he got shares in the company, Servergy Inc., in exchange for raising $840,000 in investor funds.“The primary deficiency was, and remains, that Paxton had no plausible legal duty to disclose his compensation arrangement with investors,” Judge Mazzant wrote.“I have maintained all along this whole saga is a political witch hunt,” Mr. Paxton said in a written statement. “Today’s ruling to dismiss the charges with prejudice confirms that these charges were baseless when the SEC initially brought them.”SEC spokesman John Nester declined to immediately comment.The alleged violations took place before Mr. Paxton’s election as attorney general, when he was a state lawmaker representing a suburban Dallas district.
Paxton still faces criminal charges, which are almost identical to the civial charges recently dismissed. That trial is currently scheduled for May 1.
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