Criminal Complaint Filed Against Sen. Ken Paxton

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Republican Sen. Ken Paxton: Do not pass go, do not collect $200

At the beginning of the month, it was becoming clear Republican State Senator and nominee for Texas Attorney General Ken Paxton could become toxic to the entire Texas Republican slate. Paxton admitted to violating the Texas Securities Act when he failed to register as an investment advisor when soliciting clients and paid a fine as a result of his violation. However, Paxton's actions may have also been criminal. To find out, an investigation would need to be held by Texas' Public Integrity Unit.

It is rare for Texas' Public Integrity Unit, led by the incumbent District Attorney of Travis County, to open an investigation on their own. Often, formal criminal complaints must be filed for an investigation to begin. Recently, such a criminal complaint was filed against Senator Paxton by the watchdog group Texans for Public Justice.

The criminal complaint lays out a direct case of what it is believed Paxton did and how the law was violated. The complaint is now expected to be reviewed by a staff lawyer for the Public Integrity Unit to determine if the Public Integrity Unit has jurisdiction and if a formal investigation is warranted should the Public Integrity Unit have jurisdiction.

Should Ken Paxton be convicted of committing a felony, he will be unqualified and ineligible to serve as Texas Attorney General.

The official criminal complaint which is a direct and stinging indictment on Sen. Paxton's potentially criminal past can be read in full after the jump.

Dear Ms. Lehmberg and Mr. Cox,

I believe that Mr. Kenneth Warren Paxton, Jr. has committed one or more criminal felony offenses related to his activities as an investment advisor representative for Mowery Capital Management, LLC (MCM). I encourage your offices to investigate and, if warranted, appropriately prosecute Mr. Paxton for his felony criminal conduct.

The public record appears to be unambiguously clear that Mr. Paxton violated provisions of the Texas Securities Act in 2004, 2005 and 2012 by failing to register as an investment adviser representative of Mowery Capital Management as the law requires.

As widely reported in the media, on April 30, 2014, by sworn acknowledgement, Mr. Paxton admitted to conduct that violated the Texas Securities Act. His sworn acknowledgement resulted in Disciplinary Order No. IC14-CAF-03 entered against him on May 2, 2014 by Texas Securities Commissioner John Morgan.

By agreeing to the Disciplinary Order Mr. Paxton has acknowledged that he solicited clients for MCM and was compensated by MCM for each client he delivered. Mr. Paxton also acknowledged that he was not registered with the Texas Securities Board as a representative of MCM during 2004, 2005 and 2012 when he actively solicited clients and potential investors.

The Texas Securities Act prohibits a person from acting as an investment adviser representative for an investment firm in Texas unless the person is registered as a representative for that particular firm. The Texas Securities Act provides that any person who renders services as an investment advisor representative without being registered as required by the Act is guilty of a felony of the third degree.

I therefore request that you fully investigate this matter and prosecute any violations if justified by the law and the facts.


Craig McDonald

Director, Texans for Public Justice

You can follow me on Twitter at @trowaman.


About Author

Joseph Vogas

Joseph was raised in Friendswood, Texas in North Galveston County. He went on to graduate from the University of North Texas with a degree in Political Science. After working for multiple campaigns, Joseph was able to work in the 83rd legislature in Austin in 2013. While retired from professional campaign work, Joseph enjoys sharing his knowledge of campaign data how to win elections in naturally unfriendly turf with others. Joseph is an avid archer and enjoys all things geek including Star Wars and DC Comics.

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