Ken Paxton, Attorney General for Texas has been sued by the US regulators on Monday for being allegedly involved in a stock scam. The scam involves defrauding investors in a Texas based company, naming Servergy Inc.
The software company and its former chief executive officer, William Mapp have been accused of selling private stock while misleading investors about energy efficiency of its single product. US Securities and Exchange Commission (SEC) has filed the lawsuit. Paxton has allegedly been working for raising investor funds on behalf of the company without disclosing his commissions, reports Reuters.
In addition to the civil filing by the SEC, a related criminal lawsuit has also been filed against Paxton on the allegation of Securities fraud. Notably mentioning, Paxton has been indicted by a Texas state grand jury during last year in two fraud charges connected to stock sales and compensation from Servergy, according to a report published in CNBC.
Paxton, a Tea Party Republican, has also been facing charges on accusation of illegally acting as a securities agent on behalf of another firm run by a political ally. However, a spokesperson for Paxton has denied the allegation citing the suit as politically motivated.
The Texan software company has already cut ties with Mapp. It has also agreed counting penalty of $200,000 to settle the SEC's charges without acknowledging or denying the charges brought against it by the US regulators.
Monday's lawsuit accuses Paxton for helping heave $840,000 for Servergy. He has allegedly received commission in the form of 100,000 shares of the company's common stock. Furthermore, SEC has also accused him of not informing the investors about his arrangement with the company, reports Lawyer Herald. Paxton has sued President Barack Obama at least eight times since appointed attorney general last year. The lawsuits have been filed centering taxes under Obama's signature healthcare law and blocking resettlement of Syrian refugees in Texas. Meanwhile, the Texas Democratic Party has urged Paxton to step down from his post. A consensus extracted from poll conducted last year by the Texas Bipartisan Justice Committee also echoes the call since 62% of the Republicans have opined in favor of the call.
Join the Conversation