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SEC to try again with Paxton

If at first you don’t succeed

Best mugshot ever

Best mugshot ever

The U.S. Securities and Exchange Commission is not giving up on its case against Attorney General Ken Paxton.

The commission filed amended civil charges against Paxton on Friday, two weeks after a federal judge dismissed the case. Paxton, who is also fighting similar criminal charges at the state level, is accused of misleading investors in a company years ago.

“We are disappointed by the SEC’s decision to continue this case, given the court’s opinion and the clear infirmities the court found with the commission’s original complaint,” Paxton lawyer Matthew Martens said in a statement. “We will evaluate the revised complaint and respond accordingly.”

Earlier this month, U.S. District Judge Amos L. Mazzant III threw out the SEC case against Paxton but gave the commission 14 days — until Friday — to file amended allegations.

The updated charges contend that the group of investors Paxton allegedly duped when he persuaded them to invest in a tech start-up called Servergy “reasonably expected” him to disclose he was receiving a commission. According to the SEC, the members of the group had a standing policy that “no one member makes money or otherwise benefits off of the investment of another member.”

The amended allegations also amplify the SEC’s argument that Paxton did not simply fail to disclose but “actively concealed” his commission agreement from the investor group. He did so, the SEC says, by not mentioning it in filings with the Texas Ethics Commission and the IRS, ignoring efforts by the group to learn about his relationship with Servergy and mischaracterizing the compensation as a kind of gift when asked about it by the SEC.

See here for the background. I have no idea if this is a necessary technical correction to allow otherwise-viable charges to go forward, or if it’s a “what the heck, we may as well give it one last try” situation. Paxton still has the criminal charges to deal with, so if nothing else this is a distraction from that. Trail Blazers has more.

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