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Judge dismisses SEC case against Ken Paxton

A judge has thrown out a federal civil case accusing Attorney General Ken Paxton of securities fraud, giving him his biggest legal victory yet since the allegations surfaced more than a year ago.

U.S. District Judge Amos L. Mazzant III on Friday granted Paxton’s motion to dismiss the lawsuit but gave the U.S. Securities and Exchange Commission 14 days to amend its allegations against the attorney general. Paxton is still fighting similar criminal charges at the state level.

Paxton is accused of misleading investors in a company from before he took office as Texas’ top lawyer. One of the central allegations is that he persuaded a group of people to invest in the company, a technology startup known as Severgy, without disclosing that he was receiving a commission.

Mazzant was skeptical of the SEC’s case against Paxton in a hearing last month, at one point suggesting the federal government was trying to fit a “square peg into a round hole.” In his opinion Friday, Mazzant wrote that the court “has determined that under the facts pleaded by the [SEC], Paxton did not have a legal obligation to disclose his financial arrangement.”

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