Feds file civil fraud charges against Texas Attorney General Ken Paxton
Federal regulators on Monday sued Texas Attorney General Ken Paxton for allegedly committing securities fraud, the same charge he is fighting in a state criminal court.
The civil lawsuit, filed Monday in an East Texas federal court by the U.S. Securities and Exchange Commission, alleges that Paxton raised nearly $1 million for a Collin County technology startup without disclosing to the investors that he was being compensated to promote the company.
The firm, Servergy, Inc., also was named in the complaint, as were former company officials William Mapp and Caleb White. Servergy and White already have settled their cases by paying a combined $260,000 in penalties, according to the SEC. A Paxton lawyer indicated the attorney general would not be settling.
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The allegations are virtually the same as those that led to an indictment of Paxton by a Collin County grand jury last year. Those charges still are pending; a hearing is scheduled for next month on an attempt by Paxton's lawyers to dismiss them.
Those charges are felonies that could be punishable by jail time. The federal lawsuit is a civil case that would only result in a fine, whether through a settlement or a ruling by a judge.
