Attorney General Ken Paxton, facing charges he duped investors in a North Texas startup, is refusing to engage in settlement talks with the U.S Securities and Exchange Commission – and could be the last holdout in the case if it goes to trial.
William Mapp, the founder and CEO of the company for which Paxton is accused of illegally selling securities, is open to negotiating a legal settlement with the SEC, according to court records.
“From Mr. Paxton’s standpoint, there’s nothing to settle and that’s a big difference between our position and Mr. Mapp’s position,” said Bill Mateja, Paxton’s lawyer. “We expect to be exonerated. We want our day in court and we believe we will be exonerated.”
Paxton, who indicated to the court this month he would refuse to negotiate, would be the lone defendant left to fight charges from the SEC should Mapp agree to a settlement.
The parties are due in a Sherman federal district court Friday to give oral arguments on whether the SEC charges should be dismissed.
Unless the case is dismissed or Mapp signs a settlement deal, Paxton and Mapp will be tried together, likely in the fall of 2017.
Charges filed by the SEC in April also named former Servergy director Caleb White and Servergy. Both have settled with the SEC.
White paid $66,000 he received in commissions and returned 20,000 shares of stock to the company. Servergy paid a $200,000 penalty.
See here, here, and here for the background. Whatever the merits of the SEC case against him, Paxton cannot afford to settle this case. He’s bet everything on getting off the hook on the state charges, and settling with the SEC would send a very mixed signal to the vocal supporters who have been loudly insisting he’s being railroaded. Politically, losing this case is a better outcome for him than a slap-on-the-wrist settlement, because it’s in keeping with the narrative of him being a fighter that’s being persecuted. The best outcome, of course, is for the charges to be dismissed. We’ll see how it goes.