An East Texas jury on Wednesday found William E. Mapp liable for one count of negligence for misleading investors about the business prospects of McKinney-based Servergy, the company that he founded and formerly led. But it also cleared Mapp of seven other charges that alleged Mapp had committed fraud and offered unregistered securities.
Lawyers for both Mapp and the U.S. Securities & Exchange Commission, which brought the lawsuit, are calling the verdict a victory.
“Our region enjoys an excellent mix of investment opportunities in new and innovative technologies,” Shamoil Shipchandler, director of the SEC’s Fort Worth regional office, said in a written statement. “But, as the jury found, Mr. Mapp took advantage of investors when he misled them about the capabilities of and demand for his company’s sole product.”
Jessica Magee, the associate director of enforcement for the SEC in Fort Worth, said she is “pleased” the jury agreed with the SEC’s allegations “and was persuaded that the evidence established by Mr. Mapp misled Servergy’s investors. The Fort Worth Regional Office will continue to take cases to trial where necessary to protect investors.”
But Jason Lewis, who led the defense for Mapp at trial, said he views the jury’s verdict as a victory.
“After an eight-day trial, we are very pleased with the jury’s verdict finding that Mr. Mapp did not intentionally violate the securities laws and also clearing him of multiple baseless fraud charges and offering unregistered securities,” Lewis, a partner in Greenberg Traurig’s Dallas office, said in an email. “While the jury did find one negligence count under 17(a)(2) out of the seven claims brought, we clearly view this as an absolute victory for Mr. Mapp.
“Mr. Mapp has endured over four years of investigation and litigation brought by the SEC, and we are extremely happy for Mr. Mapp and his family,” he added.
Lewis said no civil penalty has been determined yet for the negligence finding against Mapp and that he will argue that Mapp should not have to pay anything.
“We will be arguing that Mr. Mapp did not obtain money or property related to the single negligence count,” he said.
Mapp’s case is part of a bigger web of civil securities fraud litigation that the government brought against Texas Attorney General Ken Paxton, which were dismissed for a second time earlier this year by U.S. District Judge Amos Mazzant. Paxton faces state criminal charges in a trial set for early next year.
Servergy and Caleb White, a former company board member, were ansi defendants in the SEC civil suit, but both settled with the government before trial.
The SEC’s litigation is being handled by Fort Worth attorneys Matthew Gulde, Timothy Evans, Samantha Martin and Deborah Minnick and supervised by Magee and David Fraser.
In addition to Lewis, Mapp’s defense team also included Greenberg Traurig partner David Klaudt and associates Natalie Deyo Thompson and Amanda Ruth McKinzie.