The Securities and Exchange Commission has filed charges in federal court against a company known as Servergy Inc which counted Texas Attorney General Ken Paxton as one of its promoters.
While Servegy faces allegations that the company straight-up lied to investors about the quality of their products, Paxton is accused of raising money for the company without disclosing that he received a commission for it.
From the SEC’s press release:
Also charged in the SEC’s complaint is Texas Attorney General Ken Paxton and a former member of the company’s board of directors for allegedly recruiting investors while hiding they were being compensated to promote the company’s stock. […]
While serving in the Texas House of Representatives, Paxton allegedly reached an agreement with [William E. Mapp] to promote Servergy to prospective investors in return for shares of Servergy stock. According to the SEC’s complaint, Paxton raised $840,000 in investor funds for Servergy and received 100,000 shares of stock in return, but never disclosed his commissions to prospective investors while recruiting them.
While Paxton faces these fresh civil charges filed by the SEC in federal court, the Texas attorney general is already facing criminal charges for his role with the company.
A grand jury indicted Paxton last summer on criminal felony charges for securities fraud and failing to register with the Texas state securities board.