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AUSTIN (CBSDFW.COM/AP) – A judge has granted a possible dismissal of the felony criminal charges against Texas Attorney General Ken Paxton.
The judge tells prosecutors they need to change the charges they filed against him for securities fraud.
The apparent collapse of a civil case brought by the U.S. Securities and Exchange Commission is still a major victory for Paxton, a Republican who has spent most of his 20 months on the job under felony indictment.
He has pleaded not guilty in the criminal case while trying to preserve a high profile nationally, leading lawsuits against the Obama administration over immigration, transgender rights and Syrian refugees.
U.S. District Judge Amos Mazzant “conditionally granted” a dismissal of the civil lawsuit but gave federal regulators two weeks to restate its case.
Matthew Martens, a partner from WilmerHale who is General Paxton’s lead attorney in the SEC matter, applauded the judge’s decision. “This is a victory for Ken Paxton. Obviously, we are pleased with the Court’s ruling today.”
Attorney General Paxton said, “I appreciate the judge’s thorough review and I am gratified by his dismissal of the entire case.”
Bill Mateja, a shareholder from Polsinelli who is on both Paxton’s SEC and criminal defense teams, added: “Now we turn our attention to Ken’s exoneration in the state matter where the prosecutor’s burden is even higher. The fraud allegations in the SEC case mirror those in the state case.”
The cases brought by the SEC and criminal prosecutors are virtually identical: Both accused Paxton of luring investors to high-tech startup Servergy in 2011 without disclosing that he was being paid by the data storage company. At the time, Paxton was a state legislator from suburban Dallas, and one investor he allegedly misled was a fellow Republican lawmaker.
“Paxton did not have a legal obligation to disclose his financial arrangement,” Mazzant wrote.
Two courts have so far refused to throw out two felony charges of securities fraud, which carry a possible sentence of 5 to 99 years in prison. Unless the indictments are quashed by Texas’ highest criminal court, Paxton is likely to stand trial in 2017.
Federal regulators say Paxton raised $840,000 by betraying friends and using high-pressure tactics to secure investors.
He hasn’t been the only state attorney general in legal trouble. In August, Pennsylvania Attorney General Kathleen Kane resigned after the Democrat was convicted of perjury and conspiracy in a case surrounding leaked grand jury information.
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