A federal judge in Texas dismissed securities fraud charges on Thursday leveled against state Attorney General Ken Paxton, saying he did not act illegally in his dealing with a technology company U.S. regulators have accused of defrauding investors.
Paxton is also facing state security fraud charges for his relationship with the Texas company, Servergy Inc, and a separate investment firm. The Tea Party Republican, who has been trying for months to have all charges dismissed, has said he is the victim of a political witch hunt.
The U.S. Securities and Exchange Commission has accused Servergy, a computer hardware company that develops cloud-based data storage servers, of selling private stock while misleading investors about the energy efficiency of its sole product.
It also accused Paxton of working to raise investor funds for the company without disclosing his commissions.
In dismissing the federal charges, U.S. District Judge Amos Mazzant said Paxton “had no plausible legal duty to disclose his compensation arrangement with investors.”
Paxton, who was then a member of the state legislature, recruited investors for Servergy between July 11 and 31, 2011. He raised $840,000, or about one-third of all the investment funds Servergy attracted that year, the judge said.
“The primary deficiency was, and remains, that Paxton had no plausible legal duty to disclose his compensation arrangement with investors,” the judge said. Last year, he had thrown out similar charges against Paxton and took up the case again when the SEC amended its filing.
Paxton applauded the decision.
“Today’s ruling to dismiss the charges with prejudice confirms that these charges were baseless when the SEC initially brought them and they were without merit when the SEC re-filed them,” he said in a statement.
Servergy agreed to a $200,000 penalty to settle the SEC case. It neither admitted to nor denied the agency’s charges.
The state felony fraud case against Paxton is set to start on May 1.
Paxton, who has sued the administration of former Democratic president Barack Obama more than a dozen times since he took office as the state’s top lawyer in 2015, faces up to 99 years in prison if he is convicted on the most serious charge.
(Reporting by Jon Herskovitz; Editing by Lisa Von Ahn)
Tongue-tied GOP strategist crashes and burns on-air while trying to deny Trump’s racism
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"I'm a black man, I'm a Republican and a black man," the Rev. Joe Watkins interjected. "My mother's an immigrant, I would be angry if someone said that to my mother."
"Oh, it’s very offensive. But he did not say, because you are this color, go back to where you came from," Tarkanian argued. "I’m not supporting that tweet. Was it racist? No. Was it stupid? Yes."
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CNN interviewed a supporter of President Donald Trump in Eau Claire, Wisconsin who refused to acknowledge the racism in the president's "Go Back" attacks on four women of color in Congress.
The network interviewed Kerri Krumenauer of Wiersgalla Plumbing & Heating Company about Trump's attacks.
"How is it racist?" she asked.
"If you don't like this country, get out," she demanded. "Leave!"
She then showed how misinformed she was about the incident.
"He didn't use any names -- they stood up," she falsely claimed. In fact, Trump did use names and the targets did not stand up as they were not at his North Carolina campaign rally.
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Writing for CNN on Saturday, election forecaster Harry Enten explained how President Donald Trump's recent, racist behavior lies in his desire to recreate the same electoral conditions that gave him a victory in 2016 in the presidential election next year.
"The Trump strategy is pretty simple: 1. Drive up the unfavorable ratings of his Democratic rival as he did in 2016 in order to compensate for his own low ratings. 2. Bank on an electoral college/popular vote split as he did in 2016. 3. Use a campaign of racial resentment to drive up turnout even more among groups favorable toward the President," wrote Enten. As he noted, Democrats have excellent odds to flip back Michigan and Pennsylvania, but they will have to work harder to win back any of the other states Trump flipped from the 2012 Obama camp — in particular Wisconsin, which was the closest state after those two.