Texas Attorney General Ken Paxton will have securities fraud charges against him dropped after nearly a decade of legal battles. The charges stemmed from allegations that Paxton solicited investors for a Texas-based tech firm without disclosing that he was being paid a commission. As part of a pretrial agreement, Paxton will complete 100 hours of community service and 15 hours of legal ethics classes to have the charges dropped. He will also pay about $270,000 in restitution to two victims of securities fraud in the case.
Paxton, who was facing multiple felony charges including securities fraud and failing to register as an investment advisor, could have faced a sentence of up to 99 years in prison if found guilty. However, his attorney announced during a pretrial hearing that Paxton was willing to agree to the terms of the dismissal. While Paxton will not be admitting to any wrongdoing or entering a plea, the charges will be dropped as part of the agreement. The case faced numerous delays over the years, including disputes between special prosecutors and arguments over where the trial should take place.
Aside from the securities fraud case, Paxton is also under investigation by the Justice Department for allegations of corruption. Former staff members have accused him of retaliation and criminal acts, particularly in his relationship with Austin-based real estate developer Nate Paul. The investigation claims that Paxton interfered in lawsuits involving Paul and issued legal opinions to benefit him. There are also allegations that Paul hired a woman Paxton allegedly had an affair with in exchange for legal support and payment toward renovations to Paxton’s home. Despite facing an impeachment inquiry and impeachment by the state House, Paxton was later acquitted by the Senate.
The Securities and Exchange Commission also filed charges against Paxton regarding the same allegations of securities fraud, but those charges were dismissed by a federal judge who stated that federal law did not require Paxton to disclose the payment from Servergy. This case has followed Paxton since 2015, just months into his first term as attorney general. During that time, prosecutors claimed that Paxton had brought in $840,000 from investors into Servergy and had been compensated with shares in the company valued at approximately $100,000. The case took nine years to reach this point due to various delays and disputes throughout the legal process.
Moving forward, Paxton will need to complete his agreed-upon community service and ethics classes in order for the securities fraud charges to be formally dropped. It remains to be seen how the Justice Department’s investigation into his alleged corruption will unfold, as well as any potential impact on Paxton’s political career. Despite the tumultuous legal battles, Paxton’s acquittal by the state Senate in the impeachment proceedings may provide him with some level of political protection as he continues to serve as Texas Attorney General.
