The U.S. regulators charged Texas Attorney General Ken Paxton on Monday for his alleged role in a stock scam. He is said to be involved in the stock swindle that defrauded investors in a Texas-based technology company, called Servergy Inc.
According to Reuters, the U.S. Securities and Exchange Commission accused the company and former Chief Executive Officer, William Mapp, of selling private stock. They also misled the investors about the energy effectiveness of its sole product, and alleged the Texas Attorney General of working to increase investor funds for the company without disclosing his commissions.
The U.S. SEC's civil case was filed after a related criminal case against Paxton for securities fraud. Just last year, a Texas State grand jury prosecuted Paxton on two fraud charges in connection with the company's stock sales and compensation.
Yahoo! News noted that a Texas state grand jury also indicted Paxton last year for his alleged role in a plan to mislead the company's investors. "Like the criminal matter, Mr. Paxton vehemently denies the allegations in the civil lawsuit and looks forward to not only all of the facts coming out, but also to establishing his innocence in both the civil and criminal matters," stated William Mateja, Paxton's Dallas-based lawyer.
Servery, a Texas-based technology company, had already cut ties with Mapp. It agreed to shell off $200,000 in penalty to settle the SEC's charges without admitting or denying the U.S. regulators' charges.
The U.S. regulators already filed the lawsuit against the Texas Attorney General and the ex-executives of Severgy. Paxton has been already involved with a felony criminal indictment in Texas over accusations that he defrauded wealthy investors in 2011, as reported by The Guardian.
The court case filed in the federal court in North Texas on Monday alleged Paxton of helping heave $840,000 for Servergy. He was also allegedly being paid in the form of 100,000 shares of the company's common stock. Moreover, the SEC accused him of not telling the investors of his arrangement with the company.
Meanwhile, Severgy is under a new CEO and has considered Monday's announcement the end of the matter. But the company's lawyer could not immediately be reached for any comment regarding the company's current situation.
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