By Lauren McGaughy of The Dallas Morning News
AUSTIN (April 11) – The U.S. Securities and Exchange Commission on Monday charged Texas Attorney General Ken Paxton with civil securities fraud for promoting a North Texas tech firm, adding to the first-term Republican’s growing legal woes.
Paxton and Tyler resident Caleb J. White, 36, were charged with allegedly convincing others to buy stock in North Texas tech firm Servergy, Inc. without disclosing they were being paid to promote the company. The attorney general, a Republican from McKinney, also faces criminal fraud charges in Texas for these same allegations.
“Despite a duty to do so, Paxton knowingly or recklessly failed to inform the individuals he recruited that he was being compensated to promote Servergy to investors,” the SEC complaint read. Paxton allegedly raised $840,000 from investors for the company, for which he received 100,000 shares of Servergy stock. He also allegedly did not tell the investors he himself had not bought stock in the company.
Read the Dallas Morning News’ full article here, which will be updated throughout the day.