Two down, one left.
A judge has thrown out the federal civil case accusing Attorney General Ken Paxton of securities fraud, giving him his biggest legal victory yet since the allegations surfaced more than a year ago.
U.S. District Judge Amos L. Mazzant III on Friday granted Paxton’s motion to dismiss the lawsuit but gave the U.S. Securities and Exchange Commission 14 days to amend its allegations against the attorney general. Paxton is still fighting similar criminal charges at the state level.
Paxton is accused of misleading investors in a company from before he took office as Texas’ top lawyer. One of the central allegations is that he persuaded a group of people to invest in the company, a technology startup known as Severgy, without disclosing that he was receiving a commission.
“This case is not about whether Paxton had a moral obligation to disclose his financial arrangement with Servergy to potential investors,” Mazzant wrote in a 29-page ruling. “This case is also not about whether Paxton had some general obligation to disclose his financial arrangement to his investor group.”
Rather, Mazzant concluded, the case is about whether Paxton had a legal obligation to make a disclosure, and he did not — at least according to the facts put forward by the SEC.
See here for the background. No question, this is a big win for Paxton. I’m not qualified to say whether this result tells us anything about how the state case may go, but the bottom line is that the state case is now the only thing he has to worry about. The Chron and the Press have more.