A bigger penalty this time, though he’s still in business.
Mowery Capital Management, a McKinney-based investment firm with ties to indicted Attorney General Ken Paxton, has been fined $90,000 for violating state securities laws by providing false documents to Texas investigators and misleading clients about a past bankruptcy, state filings show.
The cease-and-desist order by Securities Commissioner John Morgan was issued late Friday, officials said.
The order requires Mowery Capital and its head, Frederick “Fritz” Mowery, to “immediately cease and desist from engaging in any fraudulent conduct enumerated herein in connection with rendering services as an investment adviser,” according to the 24-page order that cited six specific violations of state securities law.
The charges paralleled ones recommended by two administrative law judges last August against the firm and Mowery, a longtime Paxton friend and business associate. But the order did not levy harsher punishments that could have included revocation of their state licenses or higher fines ordered for similar violations in other cases.
According to the order, Mowery violated securities laws by making misrepresentations in required disclosure documents and failing to properly disclose business ties to clients, among other actions.
Securities Board investigators had earlier alleged that Mowery backdated documents to try to show that his firm made required disclosures of a finder’s fee arrangement, apparently involving Paxton.
One allegation was that Mowery provided false testimony by denying to board employees that he had lifted and put on his firm’s website for eight years entire passages written by economist and television commentator Larry Kudlow, without crediting Kudlow.
Other allegations: That Mowery and his firm falsely represented in a client brochure that they had used a “discount broker,” when they were using a more costly firm, and that Mowery had not been in bankruptcy proceedings, even though he had declared bankruptcy in 2005.
See here and here for the background on Mowery, and here and here for his last trip to see the State Securities Board. The cost for that previous trip was $60,000 in fines. It’s not clear to me why there was a separate set of charges, and there’s no mention of the appeal by the Board of the other judges’ decision to leave Mowery’s license intact. What is clear is that the closer you are to Ken Paxton, the more likely you are to be in trouble of some sort. Trail Blazers has more.