Texas attorney general pleads not guilty to securities fraud

28 Aug 2015 | Author: | No comments yet »

Attorney General Ken Paxton seeks new attorney on securities fraud charges.

FORT WORTH, Texas — Texas Attorney General Ken Paxton pleaded not guilty to charges of securities fraud related to his business dealings before his election in November. Kendall said in his motion that differences arose that “make continued representation untenable.” Paxton, 52, had entered a not guilty plea through a document filed Monday and waived arraignment. Texas’ top law enforcement officer, who says he will not resign from the office he assumed in January, didn’t comment as he left the Fort Worth courthouse with his wife after the hearing.

The state’s top prosecutor appeared before State District Court Judge George Gallagher at a 10:00 a.m. hearing on Thursday morning in the Tim Curry Criminal Justice Center in Fort Worth. The 52-year-old Republican faces two felony counts of engaging in fraud concerning the sale of securities, according to an indictment unsealed August 3 in state court in Collin County, north of Dallas. Kendall, a former federal and state district judge, gave no further explanation beyond saying there were “issues” that made his continued involvement in the case difficult. Paxton “intentionally failed to disclose” to a pair of investors that he was compensated for soliciting funds for Servergy Inc., a McKinney, Texas-based technology company, according to the filing. Said Paxton: “He has helped me in various aspects, not as co-counsel.” Before leaving the case, Kendall read a statement from Paxton asking the judge to consider moving the proceedings back to Collin County and barring news cameras from the courtroom.

The alleged deception happened in 2011, when Paxton was a state legislator, and a fellow Republican legislator is among those he is accused of deceiving. A third criminal count against Paxton accuses him of failing to register with state regulators while acting as a security adviser representative in 2012, according to court filings. In a motion filed with the court, Kendall wrote that recent differences had “adversely” impacted his relationship with Paxton and made any continued work “untenable.” Paxton said he intends to have a new attorney by next week.

Later that morning, Schulte tweeted that “clarification will be forthcoming today” about who would be representing Paxton. “It’s unfortunate that Joe Kendall created this confusion in court as he was leaving the team,” Schulte said. Regardless, I will continue to serve the people of Texas as Attorney General and continue to fight for the freedoms guaranteed under our Constitution.” The courtroom was packed with media as well as Paxton supporters.

Paxton’s Republican supporters and Texas Democrats sharply disagree over the use of cameras in the courtroom. “I understand, from the media’s point of view, that of course they would want to have cameras,” said Paxton supporter Cathie Adams. “But the U.S. Telling the judge they would not raise a formal objection “this time,” Wice pointed out that Paxton was on this “third lawyer in as many months.” He said that he hoped the pattern did not become a stalling tactic. Paxton seldom spoke in court, but he had Kendall tell the judge he would fight any effort to move the case out of Collin County, where he is from, and ask that no cameras be allowed at future proceedings. Gallagher, who allowed a TV station to broadcast Thursday’s hearing live, reminded Paxton that he, the judge, would decide whether to allow cameras.

The Arlington Republican called the charges against Paxton strictly political, saying there would be no criminal case had Paxton not been elected attorney general. Critics said this amounted to special treatment. “He continues to operate that Ken Paxton has rules for himself, but everyone else has to operate under a different set of rules,” Texas Democratic Party Director Manny Garcia said. Securities and Exchange Commission investigation into whether it defrauded investors with false claims about the sales of its data servers and their technological capabilities. “I am innocent of these charges.

Greg Abbott and other top Texas Republicans haven’t publicly rallied behind Paxton, though one GOP state lawmaker was in court to watch the proceedings. Bill Zedler, R-Arlington, attended the hearing to lend support to Paxton. “There are thousands of people around this state who not only voted for Ken Paxton but are today down on their knees praying for him because that is the kind of caliber of man he is,” said Adams, who sat in the front row of the courtroom next to Paxton’s wife. So in both the legal and political realms, Paxton needs fighters who can dig into the specifics of the case — not offer generalities that they don’t back up. Wice and Schaffer said they have scanned more than 14,000 documents onto CDs to present as evidence during the discovery process and expect to scan another 8,000 by the end of the month.

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