Texas attorney general charged with federal securities fraud

(Image credit: Twitter.com/statesman)

last updated 12 April 2016

Texas Attorney General Ken Paxton was charged Monday with securities fraud for allegedly defrauding investors for a startup while he was a member of the Texas House of Representatives.

The U.S. Securities and Exchange Commission accuses Paxton, a Republican, of improperly recruiting investors for the tech startup Servergy Inc. without letting them know he was being paid in the form of 100,000 shares to do so, NPR reports. Last year, Paxton was indicted on two state first-degree felony counts and a third-degree felony count for acting as an investment adviser while not being registered.

Paxton can legally remain in office while under indictment, NPR reports, and while Servergy and former company official Caleb White have settled their cases, Paxton's lawyer says the attorney general has no plans to do the same. "Like the criminal matter, Mr. 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 civil and criminal matters," Bill Mateja told The Associated Press.

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Catherine Garcia has worked as a senior writer at The Week since 2014. Her writing and reporting have appeared in Entertainment Weekly, The New York Times, Wirecutter, NBC News and "The Book of Jezebel," among others. She's a graduate of the University of Redlands and the Columbia University Graduate School of Journalism.

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