AUSTIN - Texas Attorney General Ken Paxton today agreed to an 18-month pretrial intervention agreement proposed by the Special Prosecutors in exchange for dismissal of all charges against him in connection with the case The State of Texas v Warren Kenneth Paxton, Jr., a press release states.
Under the terms of the agreement, Paxton will not admit guilt to any of the charges alleged and has agreed to complete continuing legal education training, provide community service, and pay restitution to the alleged victims named in the securities fraud indictments. Upon successful completion of the terms of the agreement, prosecutors have agreed to dismiss not only the securities fraud indictments, but also the failure to register as an investment adviser representative indictment.
“Today, Ken Paxton agreed to the Special Prosecutors’ proposal to dismiss all charges against him,” said Dan Cogdell of the Cogdell Law Firm. “After he completes the conditions that the Special Prosecutors proposed, the case will end without any admissions on his part or any finding of guilt – because he’s not guilty of anything in this case. This was the right result for a variety of reasons and will allow him to get back to doing what he was elected to do – represent the citizens and interests of Texas. This case has been pending literally longer than the Beatles were together – it was time to move on – and this proposal by the Special Prosecutors allows him to do just that.”
By way of background, the Special Prosecutors brought the three indictments, including two for securities fraud, against Paxton in July 2015. The Securities and Enforcement Commission followed suit by filing a copycat enforcement action in the Eastern District of Texas in April 2016 alleging Paxton engaged in securities fraud. The facts of the criminal and civil cases were identical.
In October 2016, U.S. District Judge Amos Mazzant dismissed the SEC complaint in October 2016 and later dismissed an amended SEC complaint in March 2017. Judge Mazzant explained that no matter whether Texas state law or federal securities law applied, the SEC had not proven a fiduciary relationship between Paxton and the investors that he promoted Servergy Inc stock to. Accordingly, Paxton had no legal duty to disclose any commissions he was paid for promoting the stock, the press release states.