Texas Attorney General Appeals Court's Decision To Uphold Charge Against Him

AUSTIN, TX -- The defense team for the state's attorney general on Wednesday pleaded with an appeals court to reconsider its recent decision to uphold criminal charges against him, according to media reports.

Attorney General Ken Paxton -- the state's highest law enforcement official -- is charged with securities fraud with allegations he solicited investors of McKinney-based Servergy Inc. without alerting them he was being paid by the tech company. The Securities and Exchange Commission filed the charges in April. 

In its complaint, the SEC accuses Paxton of failing to disclose to would-be investors that he was making a commission in securing investors, as the Texas Tribune previously detailed. The charges originate from the time Paxton was a member of the Texas House before being elected AG in 2014. 

The Austin American-Statesman reported that Paxton's defense lawyersthis week argued that appeals courts jurists erred when they applied the law when they concurrently rejected a motion to dismiss a third charge -- failure to register as an investment adviser representative with the State Securities Board, which is a third-degree felony.

The attorney general's attorneys argued the court incorrectly asserted defendants like Paxton violate the law just by giving advice without being registered, the Statesman noted. The court should have not deemed irrelevant that advisers also must be aware they have a duty to register, the lawyers argued.

"Guilty knowledge must be proven," the Statesman quoted a Paxton attorney as telling the court. “Accordingly, Paxton respectfully requests that the court rehear this case and correct that error.”

SEC investigators accuse Paxton of persuading five investors to pony up $840,000 into Servergy, without confirming the claims of the company's founder, William Mapp, related to the sale of its data servers and their technological capabilities, the Texas Tribune previously reported.

One month later, Paxton received 100,000 shares of stock in the company.

Paxton was indicted by a grand jury on the felony securities fraud charges in August 2015. He was subsequently booked into a Dallas-area jail in Collin County and processed on two counts of first-degree securities fraud and a minor charge of failing to register. Paxton was fingerprinted and had a booking photo taken before he was released on bond. 

>>> Image: Paxton booking photo from 2015