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US judge dismisses stock scam charges against Texas attorney general

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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.

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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.

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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.

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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.

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(Reporting by Jon Herskovitz; Editing by Lisa Von Ahn)


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Rick Santorum starts shouting about Joe Biden after being unable to defend Trump’s Ukraine scheme

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After Tuesday's impeachment testimony, former Sen. Rick Santorum (R-PA) tried to defend President Donald Trump's Ukraine scheme to a CNN panel — and was reduced to shouting about former Vice President Joe Biden as his co-panelists tore down his arguments.

"Every one of the people there had the same thing, which is to change the Obama policy, which was leaving Ukrainians without any way to defend themselves ... we have [Trump] in there and fighting for Ukraine and now the Democrats are saying, well, this is wonderful, BUT..."

"Let me just ask you the question," said former Obama strategist David Axelrod. "Because this lethal aid has been important, it gives them quite a bit of leverage, the president, if he wants them."

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Sondland is in ‘tremendous trouble’ no matter how he tries to change his testimony tomorrow: NYT columnist

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On Tuesday, in the wake of testimony from several witnesses in the impeachment hearing that broadly implicated EU Ambassador Gordon Sondland in improper backchannel foreign policy, New York Times columnist Wajahat Ali suggested that Sondland is in "tremendous trouble" — and that no testimony he could give tomorrow will get him out of this mess:

No. He will be trying to save himself. The perjury plus multiple stellar witnesses paint a damning portrait. He's in tremendous trouble. https://t.co/CxN5w0EErb

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Even the Republican witnesses make Donald Trump look like a depraved criminal

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The second half of Tuesday's hearing offered something new in the Donald Trump impeachment inquiry: Witnesses called by the Republican minority on the House Intelligence Committee. It's understandable why Republicans would want these two men.

One of them was Tim Morrison, a former National Security Council aide who is among the few people directly exposed to Trump's famous phone call with Ukrainian President Volodymyr Zelensky who claims to believe there was nothing wrong with it. The other was Kurt Volker, a former special envoy to Ukraine, who appears to have been a major actor in Trump's extortion scheme in that country. Indeed, Volker was deemed one of the "three amigos" — along with Energy Secretary Rick Perry and Trump donor/EU ambassador Gordon Sondland — who Trump entrusted with Ukrainian relations as he exerted increasing pressure on the country's leaders to give into his extortion scheme.

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