SEC Drops Civil Complaint Against Ken Paxton
Ken Paxton in July 2015.
Office of the Texas Attorney General
While he's not out of the woods, Ken Paxton got some good news Thursday when U.S. District Judge Amos Mazzant dismissed the Securities and Exchange Commission's civil case against the Texas attorney general. All that separates Paxton from a clean legal slate now are two criminal trials, both based on charges that he criminally misled investors in the years before he became attorney general.
Mazzant's decision Thursday is actually the second time he's dismissed the SEC's complaint, but this time he's dismissed them "with prejudice" meaning the agency can't file another suit against Paxton.
"I have maintained all along this whole saga is a political witch hunt," said Paxton, who has claimed the charges against him were the results of the political enemies he made during the 2014 Republican primary. "Today’s ruling to dismiss the charges with prejudice confirms that these charges were baseless when the SEC initially brought them and they were without merit when the SEC refiled them. Someone needs to hold the SEC accountable for this travesty."
After Mazzant's previous dismissal, the SEC refiled its complaint to emphasize its claim that Paxton had a duty to instruct investors in a technology firm that he would receive a commission on their potential investments. Mazzant ruled that, while Paxton may have had an ethical requirement to disclose his potential windfall, he had no legal obligation to do so.
"This case has not changed since the Court conditionally dismissed the Commission’s Original Complaint," the judge wrote in his decision. "The primary deficiency was, and remains, that Paxton had no plausible legal duty to disclose his compensation arrangement with investors."
Paxton's lawyer, Bill Mateja, said in a statement Thursday he was excited to be able to focus on Paxton's first criminal trial, which is set to begin May 1.
"We are now focused on Ken Paxton’s full exoneration in the state matter, where the special prosecutor's burden is even higher and the fraud allegations in the SEC case mirror those in the state case," he said.