Ken Paxton
The name of Attorney General Ken Paxton, facing potential indictment by special prosecutors in Collin County for first-degree felony securities fraud, has surfaced in a federal probe of a company in which he is an investor.
The investigation, first reported late Tuesday by the Associated Press, centers on whether McKinney-based Servergy defrauded investors with false claims about the sales of its data servers and their technological capabilities. According to court filings by the U.S. Securities and Exchange Commission, the company is suspected of “potential misstatements” about having preorders for the servers from the online retailer Amazon and the semiconductor giant Freescale — and in assertions that the product needed up to 80 percent less cooling, energy, and space compared to other servers on the market.
Paxton’s email address appears with about 70 other contacts in one list of search terms in a subpoena of Servergy from the SEC. His name is also included in an October 2014 letter from Servergy to the SEC describing the search terms used to produce the documents the company turned over in response to a subpoena.
According to Paxton’s 2014 personal financial statement filed with the Texas Ethics Commission, he owns at least 10,000 shares in the company. The SEC filings do not indicate it is seeking documents involving Paxton or the scores of other investors and additional parties.
You can see the original AP story here. At this point, it’s hard to say what if anything this may amount to, and what if any role Paxton may have played beyond duped investor. He’s been duped before, and there’s no reason to believe he’s learned from the experience. So we’ll see. This has already been a bad year for Ken Paxton. It has the potential to get a whole lot worse.