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BREAKING: Texas GOP Attorney General Ken Paxton Charged With Securities Fraud

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Paxton Is Accused of Raising $840,000 for a Tech Company and Receiving 100,000 Shares of Stock in Exchange Without Disclosing the Commission

Texas Republican Attorney General Ken Paxton on Monday was charged with securities fraud in federal court. The U.S. Securities and Exchange Commission alleges in court documents that Paxton and one other man were paid commissions by Servergy, a technology company, “to promote the company to potential investors. Neither White nor Paxton disclosed their arrangements to prospective investors.” Servergy and its founder are also being charged. 

The Texas Tribune reports today’s charges “are similar to the allegations Paxton faces in a pending indictment handed up by a Collin County grand jury last year.”

The SEC alleges that while “serving in the Texas House of Representatives, Paxton allegedly reached an agreement,” a press release states, “to promote Servergy to prospective investors in return for shares of Servergy stock.” 

“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.”

“People recruiting investors have a legal obligation to disclose any compensation they are receiving to promote a stock, and we allege that Paxton and White concealed the compensation they were receiving for touting Servergy’s product,” Shamoil T. Shipchandler, Director of the SEC’s Fort Worth Regional Office, said in the statement.

In August of 2015, Paxton was arrested and booked on two first-degree securities fraud charges, and one charge of third-degree failure to register with the State Securities Board. First-degree felony charges carry a sentence of 5 to 99 years if convicted.

Paxton has taken an activist stance against LGBT people and their civil rights, and seems intent on using his religion in addition to his office, as tools to do so.

UPDATE I: 2:36 PM EDT –
From today’s court filing:

From November 2009 to September 2013 Servergy “raised approximately $26 million in private securities offerings to develop what it claimed was a revolutionary new server, the Cleantech-1000.”

“In oral and written communications with prospective investors, and in Servergy’s February 2013 Private Placement Memorandum (“PPM”), Servergy’s co-founder and then-CEO and Chairman William E. Mapp, III (“Mapp”) led investors to believe that the CTS-1000 was in high demand by falsely claiming notable companies like Amazon.com and Freescale Semiconductors had pre-ordered the product.”

“In addition, Mapp claimed the CTS-1000 consumed up to 80% less power than other servers and that it was positioned to compete with servers from industry leaders like Hewlett Packard, IBM, and Dell for use in large data centers. Mapp had no reasonable basis for these claims and failed to disclose that, in reality, the CTS-1000 was based on outdated technology that was being phased out of the industry.”

As part of its fundraising efforts, Servergy paid Caleb J. White (“White”) and Warren K. Paxton, Jr. (“Paxton”) commissions to promote the company to potential investors. Neither White nor Paxton disclosed their arrangements to prospective investors.”

 

 

EARLIER:

Texas AG Ken Paxton Headlines Anti-Gay Marriage And Religious Freedom Event

Ken Paxton May Face Contempt Charges For Refusing To Include Man’s Husband On Death Certificate

Ken Paxton: Repealing Nondiscrimination Law ‘Victory For Houston Pastors’ And ‘Religious Liberty’

 

This is a breaking news and developing story. Details may change. This story will be updated, and NCRM will likely publish follow-up stories on this news. Stay tuned and refresh for updates.

 

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News

Trump Urges Judge Aileen Cannon to Keep Jack Smith Report Secret

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President Donald Trump is urging U.S. District Judge Aileen Cannon to block any release of Special Counsel Jack Smith’s final report on his investigation into the president’s alleged mishandling of hundreds of classified documents, in a case that had been charged in part under the Espionage Act.

On Tuesday, Trump argued in a court filing that Smith’s report should never be made public, in what would be a deviation from previous practice, Politico reported.

The president urged Cannon, whom he nominated to the bench, “to extend her 11-month-old order blocking the Justice Department from releasing the full report, which Smith submitted shortly before Trump’s second inauguration.”

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In the court document, Trump’s attorney, Kendra Wharton, wrote that allowing the report to become public would “perpetuate Jack Smith’s unlawful criminal investigations and proceedings.”

Politico noted that the president’s filing “is infused with the typical disdain Trump has expressed for his former prosecutors, labeling Smith a ‘so-called special counsel’ and saying the case was ‘marred by numerous deficiencies and repeated abuses of office.'”

Smith dropped all charges against Trump after the U.S. Supreme Court, in a highly controversial ruling, found that presidents have extensive immunity from prosecution for official acts.

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“Trump’s request is a break from the Justice Department’s handling of all special counsel reports in recent decades,” Politico added. “Typically, those reports are provided to Congress and made public, even when they have included damaging findings about the incumbent administration.”

The day after Trump was inaugurated, Judge Cannon denied the U.S. Department of Justice’s request to share Smith’s report on his investigation into Trump’s alleged mishandling of classified documents with Congress. Her order came just hours after Trump signed an executive order to hold former government officials accountable for “unauthorized disclosure” of “sensitive” information, and “for election interference.”

Cannon refused to allow members of Congress to review Smith’s final report. Trump was investigated for alleged unlawful removal, retention, and refusal to return sensitive, classified, and top-secret documents, reportedly including nuclear and defense secrets. The FBI executed a lawful search warrant on Trump’s Mar-a-Lago resort and residence to retrieve some of the documents.

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Trump Seen Struggling to Stay Awake Repeatedly in Cabinet Meeting Video

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Once again, President Donald Trump appeared to struggle to stay awake, this time during his mid-Tuesday televised Cabinet meeting. At several points, the president was filmed with his eyes closed, occasionally reopening them while seeming disengaged.

In one 30-second clip, the president’s eyes close numerous times, then Trump nods when he is mentioned. In a shorter clip, Trump also struggles to keep his eyes open, as his hand holds up his head.

In a 23-second clip, the president is hunched over, slouching in his chair, his eyes closed in what could be described as appearing to nod off.

Trump slouches and appears to try to listen as HUD Secretary Scott Turner speaks, in this 79-second video.

READ MORE: GOP Touts ‘Gulf of America Act’ in Bold New List of Party ‘Accomplishments’

In a 17-second clip, journalist Aaron Rupar wrote, “Trump’s face is becoming contorted as he desperately tries to cling to consciousness.” In another, he called the president “Dozy Don.”

But in perhaps the most extreme capture of the president appearing to doze off, as Secretary of State Marco Rubio speaks, Trump is totally hunched over, his eyes closed, his head then falls forward, and he appears to try to wake up before seemingly falling back asleep.

While this is not the first time the president has appeared to fall asleep on camera, it comes after a massive late-night social media spree, in which Trump posted or reposted over 150 times, as Alternet reported.

Axios’ Marc Caputo noted that “Trump went on a Truth Social bender last night, posting 158 times from 9pm Monday to 12am Tuesday Just before 5:30 am, he started hitting social media again.”

The media is beginning to notice.

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Last week, The New York Times published an in-depth look at Trump’s “signs of fatigue.”

“Mr. Trump appeared to doze off during an event in the Oval Office,” one week after Halloween, the Times noted.

The president “has fewer public events on his schedule and is traveling domestically much less than he did by this point during his first year in office, in 2017, although he is taking more foreign trips,” according to the Times. “He also keeps a shorter public schedule than he used to. Most of his public appearances fall between noon and 5 p.m., on average.”

“During an Oval Office event that began around noon on Nov. 6,” the Times added, “Mr. Trump sat behind his desk for about 20 minutes as executives standing around him talked about weight-loss drugs.”

“At one point, Mr. Trump’s eyelids drooped until his eyes were almost closed, and he appeared to doze on and off for several seconds. At another point, he opened his eyes and looked toward a line of journalists watching him. He stood up only after a guest who was standing near him fainted and collapsed.”

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GOP Touts ‘Gulf of America Act’ in Bold New List of Party ‘Accomplishments’

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Speaker Mike Johnson in a House Republican leadership press conference on Tuesday told reporters, “Republicans are not just going to hold onto the majority,” in 2026. “We’re going to grow it.”

Earlier, during their conference meeting, Johnson “told House Republicans that he expects the GOP to defy history in 2026 — win more seats/not lose majority — due to their performance this year,” Punchbowl News’ Jake Sherman reported. “The party in power usually loses seats in a midterm.”

At the press conference, as reported by The Hill’s Emily Brooks, Republicans displayed three large posters detailing “House GOP Accomplishments.” The three posters list less than three dozen successes. Many of them are not related to what President Donald Trump ran on — mainly, reducing the cost of living for Americans.

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Among the thirty-plus accomplishments is the passage of the “Gulf of America Act,” which directs federal agencies to observe President Trump’s renaming of the Gulf of Mexico.

The posters also brag that they defunded USAID, NPR, and PBS.

Reports, including from The New Yorker, charge that defunding USAID has or will lead to the death of hundreds of thousands, including children:

“As of November 5th, it estimated that U.S.A.I.D.’s dismantling has already caused the deaths of six hundred thousand people, two-thirds of them children.”

In July, the UCLA Newsroom reported that “USAID cuts may lead to more than 14 million deaths globally, including 4.5 million children under 5 by 2030, researchers say.”

READ MORE: Student’s Bible-Based Essay Grade Leads University to Put Instructor on Leave

The House GOP’s posters also brag that they passed President Donald Trump’s “One Big Beautiful Bill Act,” which is responsible for gutting about $1 trillion from Medicaid. It also effectively forces cuts of hundreds of billions of dollars from Medicare, and takes a large chunk out of SNAP, the Supplemental Nutrition Assistance Program.

The posters also claim the GOP passed 331 bills, codified 67 executive orders, and accomplished the “Total Defeat of Government Shutdown.”

Bloomberg News’ Erik Wasson added that “One of the accomplishments is passing 3 out of 12 annual spending bills that were due Oct. 1.”

READ MORE: Fox Host Urges Defense of America’s ‘Christian Culture’ Against Communism

 

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