Oct 7 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)