Business

Texas attorney general charged with federal securities fraud

Posted April 11, 2016 7:00 am

By PAUL J. WEBER and JIM VERTUNO

AUSTIN, Texas (AP) - Federal securities regulators have filed civil fraud charges against Texas Attorney General Ken Paxton over recruiting investors to a high-tech startup before becoming the state's top prosecutor.

The U.S. Securities and Exchange Commission filed a civil lawsuit Monday against Paxton and former executives of Servergy Inc. Paxton is already under felony criminal indictment in Texas over allegations that he defrauded wealthy investors in the company in 2011.

Paxton attorney Bill Mateja says he hasn't reviewed the civil federal lawsuit yet but that his client "vehemently denies" any wrongdoing.

Paxton has pleaded not guilty to the criminal charges.

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This story has been corrected to reflect that the company name is Servergy instead of Severgy.

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