Texas Attorney General Indicted on Securities Fraud Charges


Texas attorney general Ken Paxton is supposed to enforce the law, but now has been accused of breaking the law. Paxton has been charged with securities fraud.

Paxton attracted investors for his friend’s energy startup, Severgy. However, Paxton neglected to tell those investors that he was being compensated for rounding them up.

From Bloomberg Politics:

The felony charges stem from 2011, when Paxton was a state legislator and allegedly encouraged two acquaintances to invest more than $100,000 apiece into Servergy, a technology startup. Paxton intentionally failed to tell the investors he hadn’t personally invested in the company and would get paid in Servergy shares for bringing them in, according to his indictment.

Paxton faces a lesser charge of failing to register as a securities adviser representative while steering clients of his estate-planning firm to a friend’s investment service. That charge mirrors a reprimand Paxton received from state securities regulators in May 2014, when he admitted to essentially the same conduct involving other clients and agreed to pay a $1,000 state administrative fine.

Paxton faces five to 99 years in prison if convicted.


Photo by TaxCredits.net via Flickr CC License


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