Securities Law

SEC sues Texas AG Ken Paxton for securities fraud; his lawyer 'vehemently denies' claims

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Ken Paxton

Texas Attorney General Ken Paxton. Image from Collin County.

A lawsuit has been filed against the attorney general of Texas by a federal securities regulator over his claimed conduct in recruiting investors to purchase stock in a technology company.

Bookending a criminal securities fraud case brought by the state of Texas last year based on similar allegations, the Securities and Exchange Commission on Monday filed a civil complaint against the state’s top law enforcement official. It says AG Ken Paxton failed to disclose to investors that he was compensated for promoting the stock of Servergy Inc., according to the Dallas Morning News’ Trail Blazers Blog and the Wall Street Journal (sub. req.).

Attorney Bill Mateja is representing the 53-year-old Paxton in both matters. He told the Dallas Morning News that Paxton “vehemently denies the allegations in the civil lawsuit” and “looks forward to not only all of the facts coming out, but also to establishing his innocence in both the civil and criminal matters.”

At issue in the SEC complaint is conduct that took place in 2011, when Paxton was still a Republican state lawmaker, the Houston Chronicle reports.

Paxton is accused by the SEC of promoting $840,000 in Servergy shares to more than a half-dozen investorsin exchange for getting 100,000 shares in undisclosed compensation, However, Paxton told the SEC that the shares were a gift.

A SEC news release provides more details.

Related coverage: “Texas attorney general is charged with securities fraud” “Unlike other suspects, Texas AG appears in his booking photo in a business suit”

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