Legal Battles

Ken Paxton Set to Stand Trial on Criminal Securities Fraud

Ken Paxton's string of good publicity ended Wednesday. Last Thursday in Dallas, Paxton celebrated the arrest of CEO Carl Ferrer on a pimping charge from California. On Friday, the Texas attorney general saw a judge throw out the Securities and Exchange Commission securities fraud lawsuit that was hanging over his head. Wednesday, however, Paxton's luck ran out. The Texas Court of Criminal Appeals, the highest criminal court in the state, refused to toss a trio of felony charges against Paxton, meaning the attorney general is going to have to answer charges that, while he was a state senator, he persuaded friends and colleagues to invest in a tech company that was paying him.

In a ruling last week, U.S. District Judge Amos Mazzant dismissed the SEC complaint, which mirrors the state criminal cases against Paxton.

“This case is not about whether Paxton had a moral obligation to disclose his financial arrangement with Servergy to potential investors,” Mazzant wrote in his ruling. “This case is also not about whether Paxton had some general obligation to disclose his financial arrangement to his investor group.”  

The Court of Criminal Appeals offered no explanation of its refusal to dismiss the state's criminal case, simply denying Paxton's request for dismissal. In a statement issued after the ruling, Paxton's lawyer, Philip Hilder, said he and his client would ask the court to hear arguments for dismissal again.

"We anticipate filing a motion for rehearing because we have tremendous confidence in our case. The charges against Ken Paxton are without merit. A federal court, following a lower legal standard, ruled that the fraud charges were baseless."

Brian Wice, part of a team of special prosecutors trying Paxton, was confident Paxton will end up going on trial sometime early next year.

"Today's ruling marks an end to Mr. Paxton's almost year-long attempt to avoid being judged by a jury of his peers," Wice said in statement released after the ruling. "We look forward to going to trial and seeking justice on behalf of the people of Texas."

In July, Paxton revealed in a financial disclosure settlement that he's received more than $325,000 from donors and personal friends to help him cover the cost of both his civil and criminal legal defenses.
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Stephen Young has written about Dallas news for the Observer since 2014. He's a Dallas native and a graduate of the University of North Texas.
Contact: Stephen Young