Texas' attorney general charged with securities fraud

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Texas Attorney General to Be Booked on Fraud Charges: Media Reports

McKINNEY, Texas (AP) — Texas Attorney General Ken Paxton turned himself in Monday to face charges that he misled investors and didn't disclose money he made for referring financial clients as part of his private business before becoming the state's top lawyer in January.

Paxton, a 52-year-old Republican, was fingerprinted and photographed at the Collin County jail while a throng of media waited outside. It was a frenzy reminiscent of one year ago when then-Texas Gov. Rick Perry — who was also still in office — was booked after being indicted on charges of abusing his power with a 2013 veto.

But whereas Perry defiantly welcomed the cameras within minutes of being processed at an Austin jail, there was no sign or word from Paxton nearly an hour after his release.

Neither Paxton nor his attorney has commented on the matter since news of the indictment leaked over the weekend. Other top Texas Republicans have also remained silent, including Gov. Greg Abbott, who last held the attorney general job, and Sen. Ted Cruz, a Republican presidential candidate and the state's one-time solicitor general.

The Texas GOP released a statement saying that Paxton deserved his say in court and praised his first seven months on the job, including his recent investigation of Planned Parenthood.

See photos of Paxton throughout his career:

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Ken Paxton, Texas attorney general
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Texas' attorney general charged with securities fraud
FILE - In this Wednesday, July 29, 2015 file photo, Texas Attorney General Ken Paxton speaks during a hearing in Austin, Texas. On Saturday, Aug. 1, 2015, Kent Schaffer, a special prosecutor, told the New York Times that Paxton has been indicted on felony charges that accuse the Republican of misleading investors before taking over as the state's top law enforcement officer. (AP Photo/Eric Gay)
Texas attorney general Ken Paxton, right, with his chief of staff Bernie McNamee, left, departs after he testified during a Texas Texas Senate Health and Human Services Committee hearing on Planned Parenthood videos covertly recorded that target the abortion provider, Wednesday, July 29, 2015, in Austin, Texas. Texas is one of a number of GOP-controlled states that have launched investigations after the release of videos in which Planned Parenthood officials discuss how to harvest tissue for research from aborted fetuses.(AP Photo/Eric Gay)
Texas attorney general Ken Paxton testifies during a Texas Texas Senate Health and Human Services Committee hearing on Planned Parenthood videos covertly recorded that target the abortion provider, Wednesday, July 29, 2015, in Austin, Texas. Texas is one of a number of GOP-controlled states that have launched investigations after the release of videos in which Planned Parenthood officials discuss how to harvest tissue for research from aborted fetuses.(AP Photo/Eric Gay)
Ken Paxton, center, joins hands with family members during a prayer after he was sworn in as the Texas attorney general, Monday, Jan. 5, 2015, in Austin, Texas. (AP Photo/Eric Gay)
FILE - In this Jan. 5, 2015, file photio, Ken Paxton speaks after he was sworn in as Texas attorney general in Austin, Texas. Paxton calls the Supreme Court decision giving same-sex couples the right to marry a "lawless ruling" and says state workers can cite their religious objections in denying marriage licenses. He warned in a statement Sunday, June 28, 2015, that any clerk, justice of the peace or other administrator who declines to issue a license to a same-sex couple could face litigation or a fine. But in the nonbinding legal opinion, Paxton says "numerous lawyers" stand ready to defend, free of charge, any public official refusing to grant one. (AP Photo/Eric Gay, File)
Rep. Ken Paxton, R-McKinney, addresses the opening session of the 82nd Texas Legislature, Tuesday, Jan. 11, 2011, in Austin, Texas. (AP Photo/Eric Gay)
Rep. Ken Paxton, R-McKinney, questions a witness during a meeting of the House Ways and Means Committee on Thursday, Feb. 10, 2005, in Austin, Texas. County and city officials pleaded with the House tax-writing committee to not limit their operating revenue by capping the amount taxing districts can increase property appraisals each year. (AP Photo/Harry Cabluck)
AUSTIN, TX - FEBRUARY 18: Governor Greg Abbott (C) speaks alongside U.S. Sen. Ted Cruz (R-TX) (L), Attorney General Ken Paxton (R) at a joint press conference February 18, 2015 in Austin, Texas. The press conference addressed the United States District Court for the Southern District of Texas' decision on the lawsuit filed by a Texas-led coalition of 26 states challenging President Obama's executive action on immigration. (Photo by Erich Schlegel/Getty Images)
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"There's a reason why Texans have warily observed this news. Some of the outrageous events surrounding this sloppy process certainly do not typify the level of quality that Texans expect from our judicial system," party spokesman Aaron Whitehead said in a statement.

Just as Perry was allowed to finish his term after his indictment, Paxton can stay on the job while his criminal case proceeds.

Paxton wore a suit and smiled for his booking photo. A small handful of Democrats rallied on the courthouse steps, some waving signs that called for Paxton's resignation.

The booking documents released Monday by the jail in Paxton's hometown of McKinney, a Republican stronghold near Dallas, show that he faces with two counts of first-degree securities fraud and a lesser charge of failing to register with state securities regulators. Each of the fraud counts carries a punishment of five to 99 years in prison.

Questions about Paxton's financial dealings shadowed the tea party conservative throughout his first seven months on the job. His aides have denied any wrongdoing by Paxton and described the criminal investigation led by two special prosecutors as a political smear campaign.

Among the allegations is that Paxton encouraged investment in Servergy Inc., a tech startup under investigation by the Securities and Exchange Commission. The Associated Press last month reported the connections between the company and Paxton, who listed himself as a shareholder and whose name is among search terms that Servergy attorneys used to satisfy a federal subpoena.

In the middle of last year's heated Republican primary, Paxton admitted to violating state securities law by not disclosing to regulators that he was receiving commissions for referring law clients to a financial planner. He paid a $1,000 fine and chalked it up as an administrative oversight.

Paxton joins other current or recent state attorneys general facing criminal charges.

A Pennsylvania grand jury in January recommended that state Attorney General Kathleen Kane face charges over allegations of engaging in a cover-up and lying about her role in a grand jury leak to a newspaper. Kane, a Democrat who took office in 2013, has not been charged and has denied breaking any laws. Utah's previous two attorneys generals were also arrested last summer on charges of running pay-to-play schemes during their combined 13 years in office.

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