Paxton Reaches Deal To End Securities Fraud Charges, Set To Pay Nearly $300,000 In Restitution

Texas Attorney General Ken Paxton agreed with prosecutors on Tuesday to pay about $270,000 in restitution and to do community service under a deal to end his nearly 9-year-old criminal securities fraud charges.

Under the agreement proposed by prosecutors, Paxton must pay full restitution to victims and will also have to complete 100 hours of community service and 15 hours of legal education.

The announcements by prosecutors came less than three weeks before Paxton was set to stand trial. If he had been convicted, Paxton could have spent up to 99 years in prison, but under the deal, all of his charges have been dismissed. 

Paxton’s defense lawyers said the AG did not admit guilt under the agreement.

“This case has been pending literally longer than the Beatles were together — it was time to move on — and this proposal by the Special Prosecutors allows him to do just that,” said Don Cogdell, one of Paxton’s defense lawyers.

This is a huge victory for Paxton, just six months after he was acquitted of corruption charges in an impeachment trial in the Texas Senate.

In this recent case, Paxton was accused of soliciting investors into a company called Servergy without disclosing that the tech company was paying him to recruit investors. The company had compensated him with 100,000 shares worth $1 a share, according to The Dallas Morning News.

One of the four people cited as victims of securities fraud was former state Rep. Byron Cook.

For this, Paxton was charged with two counts of securities fraud and one count of not being registered as an investment advisor.

Brian Wice, a special prosecutor in the case, described the deal as a victory, as it requires Paxton to repay the victims. He also acknowledged the extensive time it took to put the case to an end. Prosecutors and Paxton’s defense often disputed over trial location and payment for the state’s special prosecutors was delayed. Last month, Paxton’s defense argued that his right to a speedy trial had been violated, but prosecutors argued that the delays were caused by Paxton himself.

The securities fraud case has been haunting Paxton his entire time as an Attorney General, but in that same time he gained significant political support among GOP activists both at the state and national level, including former President Donald Trump.

Paxton even managed to conduct a partially successful revenge among those GOP legislators who voted to impeach him. But, his legal fight is not over yet.

Paxton still faces a federal investigation on a separate securities case against him and an unresolved whistleblower lawsuit from four former officials claiming to have been improperly fired from the attorney general’s office after accusing Paxton of bribery.

He also is accused of violating his duties as a lawyer by lying to the U.S. Supreme to overturn the 2020 elections.