Local News
Texas Attorney General Ken Paxton Charged with Fraud
Texas Attorney General Ken Paxton was recently charged by the U.S. Securities and Exchange Commission with civil fraud on Monday over his alleged recruitment of investors to a startup.
While Paxton “vehemently denies any wrongdoing,” as reported by Talking Points Memo, this lawsuit follows his indictment by the state of Texas over “allegations that he defrauded wealthy investors in [Servergy Inc.] in 2011.” Servergy Inc. is a high-tech startup based out of McKinney, Texas.
The civil fraud charges facing Paxton deal with the recruitment of investors to a high-tech startup prior to being the Texas Attorney General. If convicted, “he could face five to 99 years in prison” and will find himself in a Dallas state appeals court next month to tackle the criminal indictments.
The federal lawsuit filed in North Texas “accuses Paxton of helping raise $840,000 for Severgy and being paid in the form of 100,000 shares of Servergy common stock.” The central problem in the lawsuit is that he did not tell investors of this deal with the company even though he was required to.
The Texas Attorney General has pleaded not guilty to the criminal charges laid before him and does not have any plans to resign amidst this controversy.
