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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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‘Pre-Crime’: Hundreds of National Security Experts Warn Trump Order Threatens Democracy

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A coalition of hundreds of former senior national security and law enforcement officials is expressing “deep alarm” in condemning President Donald Trump’s executive order designating Antifa as a domestic terrorist organization, and calling it “a signal that the foundations of American democracy itself are under threat.”

The group likens the order to “pre-crime,” a concept from the film “Minority Report” in which people are arrested for crimes they have not yet committed — where thought itself, ahead of action, becomes criminalized.

The Steady State, a group that includes more than 330 former ambassadors, inspectors general, flag officers, defense and Homeland Security officials, and senior intelligence officers, warns that the Trump executive order is “dangerously broad,” as it calls “for scrutiny of ‘networks’ and ‘organizations’ that may ‘foment political violence,’ and even of ‘potential’ crimes.”

READ MORE: ‘The Ground Has Shifted’: Experts Warn After Trump’s ‘Gnat’ Speech to U.S. Navy

“This pre-crime approach,” The Steady State explained, “invites surveillance and targeting based not on evidence of criminal acts but on associations, ideologies, or mere suspicion. American history teaches that such preventive policing sweeps up bystanders, political opponents, and peaceful activists, eroding due process and equal protection.”

The signatories also express concern over the “troubling” use of vague ideological “indicia,” including, as the memo stated, “anti-Americanism, anti-capitalism, and anti-Christianity; extremism on migration, race, and gender; and hostility toward those who hold traditional American views on family, religion, and morality.”

The group says that these “undefined categories give sweeping discretion to enforcers. Advocacy for LGBTQ rights, criticism of government policy, or support for progressive reforms could easily be miscast as falling within them—even though such advocacy is protected by the Constitution.”

READ MORE: ‘I Don’t Negotiate With Terrorists’: GOP Congressman Targets Democrats in Outrageous Rant

The Trump memo specifically offers as an example: “Charlie Kirk’s alleged assassin engraved the bullets used in the murder with so-called ‘anti-fascist’ rhetoric.”

The Steady State explained that the U.S. Department of Justice and the FBI “may investigate crimes—arson, conspiracy, violence—but not constitutionally protected views or associations. The President’s order erases that distinction, treating a diffuse, decentralized ideology—anti-fascism—as if it were a formal organization subject to designation and criminalization. No federal statute grants the president authority to designate domestic groups or movements as terrorist organizations.”

The group’s members include Richard Danzig, the 71st Secretary of the Navy under President Bill Clinton; Asha Rangappa, a former FBI Special Agent; Alexander Vershbow, a former U.S. Ambassador to NATO, Russia, and South Korea and a former Assistant Secretary of Defense; and Edward “Ned” Price, a former State Department official.

READ MORE: ‘Literally What’s Happening’: White House Blasted for Raging at Military Takeover Talk

 

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‘Literally What’s Happening’: White House Blasted for Raging at Military Takeover Talk

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The White House appears to be telegraphing President Donald Trump’s plans to expand the domestic deployment of military forces across U.S. cities — defying opposition from local leaders — while attacking the press for reporting it.

Describing the President’s deployment of the National Guard and U.S. military, ostensibly to protect ICE agents, federal buildings, and patrol city streets, as a “proven formula” to curb crime — which FBI data show was already declining nationwide — Leavitt rebuked the press for “framing this like the president wants to take over the American cities with the military.”

Asked at Monday’s briefing if Democrats have “reason to be concerned that there are long-term plans by this administration to keep U.S. military or the National Guard in American cities, like what we’re seeing here in Washington,” White House Press Secretary Karoline Leavitt told reporters, “Why should they be concerned about the federal government offering help to make their cities a safer place?”

READ MORE: ‘The Ground Has Shifted’: Experts Warn After Trump’s ‘Gnat’ Speech to U.S. Navy

Aside from Washington, D.C., no mayor who has been notified of possible federal troops on their streets has supported the idea. Mayor Bowser has taken a reserved stance, given the District’s federal constraints. Federal law, in most cases, requires the governor to ask the President for troops.

“They should be concerned about the fact that people in their cities right now are being gunned down every single night, and the president, all he’s trying to do is fix it,” Leavitt insisted, despite troops largely being unwelcome.

She decried what she alleged was a “complete smear campaign by the Democrats and the media, quite frankly.”

“I was reading Politico Playbook this morning — one of the most inside the Beltway newsletters you can find — and you guys are framing this, like the president wants to take over the American cities with the military. The president wants to help these local leaders who have been completely ineffective in securing their own cities,” Leavitt claimed, before suggesting plans for further militarization.

“And we have already seen, there’s a positive formula for that. Look at Washington, D.C. The murder rate has declined significantly. Our streets are safer. People who live here feel safer. All of you in this room, I know you do. You just won’t admit it.”

READ MORE: ‘I Don’t Negotiate With Terrorists’: GOP Congressman Targets Democrats in Outrageous Rant

“And it’s a proven system that works, and the president wants to make America’s cities safe again,” Leavitt added. “And I don’t think there’s anything wrong with that.”

Critics blasted Leavitt’s remarks.

“Troops are being deployed to US cities where the crime rate has plummeted—against the wishes of states, cities, and local residents. It IS a takeover. No other way to frame it,” wrote political strategist Sawyer Hackett.

Democratic activist and strategist Olivia Julianna pointed to a headline that read: “Trump says military should use U.S. cities as ‘training grounds’.” She commented, “This was LAST WEEK btw.”

Author and political commentator Brian Tylor Cohen remarked: “Probably because that is *quite literally* what’s happening.”

READ MORE: ‘Intolerable Abuse of Power’: Top Democrat Rages at Trump’s ‘MAGA Propaganda’ Scheme

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‘I Don’t Negotiate With Terrorists’: GOP Congressman Targets Democrats in Outrageous Rant

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U.S. Rep. Randy Fine is under fire for remarks he made on Monday likening Democrats to “terrorists.”

Speaking to the right-wing media outlet Newsmax about the federal government shutdown, Fine, a MAGA Republican from Florida, said: “I don’t negotiate with terrorists. And what we’re learned in whether it’s dealing with Muslim terrorists or Democrats, you’ve gotta stand and you’ve gotta do the right thing.”

Fine also said he hopes Republicans “stand firm” against Democrats, “and tell them, ‘No, we’re not gonna retreat on giving free healthcare to illegal immigrants. We’re just not gonna do it.'”

“And hopefully, the American people will rise up and tell them to stop the clown show and get the government reopened,” he added.

READ MORE: ‘The Ground Has Shifted’: Experts Warn After Trump’s ‘Gnat’ Speech to U.S. Navy

Democrats are not asking to give “free healthcare to illegal immigrants,” although the President and the Republican Party continue to make that false claim. A 1986 federal law requires most hospitals to triage and treat anyone who needs medical attention regardless of citizenship status or ability to pay.

Fine’s remarks come just after President Donald Trump labeled Democrats “gnats,” a common insect, on Sunday, in remarks made to about ten thousand Navy sailors and service members. He also on Sunday claimed that “insurrectionists” are “all over” Portland, Oregon.

Last week President Trump labeled Democrats “the party of hate, evil, and Satan.”

In response to Congressman Fine’s remarks, veteran journalist John Harwood wrote: “lunatic.”

READ MORE: ‘Intolerable Abuse of Power’: Top Democrat Rages at Trump’s ‘MAGA Propaganda’ Scheme

 

Image: Wikimedia Commons/ Public domain

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