U.S. securities fraud case dismissed against Texas Attorney General

October 7, 2016 9:50 PM EDT

Texas Attorney General Ken Paxton speaks outside the U.S. Supreme Court in Washington, D.C., U.S. in this April 18, 2016 file photo. REUTERS/Joshua Roberts/File Photo

Get access to the best calls on Wall Street with StreetInsider.com's Ratings Insider Elite. Get your Free Trial here.

(Reuters) - A federal judge on Friday dismissed a civil securities fraud case against Texas Attorney General Ken Paxton, court documents showed.

The ruling in the U.S. District Court for the Eastern District of Texas marks a major victory for the Tea Party Republican who has denied violating securities laws but still faces similar, though criminal, state-level charges.

In April, the U.S. Securities and Exchange Commission (SEC) charged Paxton over what the agency said was his role in a stock scam that defrauded investors in a Texas-based technology company called Servergy Inc.

The Commission accused Paxton of working to raise investor funds for the company without disclosing his commissions.

U.S. District Judge Amos Mazzant rejected this view, writing in a 29-page ruling that, "under the facts pleaded by the Commission, Paxton did not have a legal obligation to disclose his financial arrangement."

Paxton, in a written statement, said: "I appreciate the judge's thorough review, and I am gratified by his dismissal of the entire case."

The judge also gave the SEC two weeks to amend its complaint with any additional facts that might revive their allegations.

The Securities and Exchange Commission did not immediately responded to a request for comment.

(Reporting by Eric M. Johnson in Seattle and Nate Raymond in New York; Editing by Sandra Maler)

Serious News for Serious Traders! Try StreetInsider.com Premium Free!

You May Also Be Interested In

Related Categories


Add Your Comment