Texas Attorney General Ken Paxton was acquitted of civil charges of securities fraud brought against him by the United States Securities and Exchange Commission. The SEC says Paxton encouraged investors to give money in a misleading and unlawful way to McKinney-based Software company Servergy while serving as a state legislator.
In a 29-page ruling written by United States District Judge Amos Mazzant III, Mazzant acknowledged that Paxton “actively recruited investors” for Servergy without telling said investors that he would be profiting from commissions he would receive from their investments. However, the judge says that the action is only legally relevant if the undisclosed information “renders [a] statement false or misleading,”
According to the lawsuit, Paxton raised $840,000 from investors for Servergy, in exchange for 100,000 shares of the company’s stock from its chief executive officer at the time, William Mapp III. Paxton’s attorneys said he was not required to register with the SEC because he was not an “investment adviser representative.” The ruling will not affect the outcome of the similar state criminal charges that Paxton faces on the same issues. The SEC gave no indication of how they will respond on this matter.
Our attorneys at the Law Offices of Mark T. Lassiter provide legal services for our clients in Dallas and other areas of Texas, and we handle criminal defense cases such as fraud and theft, among others. Call our offices today at (214) 845-7007 to discuss your case.