Texas grand jury convenes in securities case against attorney general

Reuters News
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Posted: Jul 28, 2015 2:10 PM

By Jon Herskovitz

AUSTIN, Texas (Reuters) - A Texas grand jury convened on Tuesday to hear evidence presented by special prosecutors and gathered by the Texas Rangers over whether the state's Attorney General Ken Paxton violated securities law, a local television station reported.

The grand jury will decide whether there is enough evidence to indict Paxton, a Republican who came to office earlier this year with strong Tea Party support, on first-degree felony charges.

The prosecutors and Rangers entered a courthouse in Collin County for a closed-door meeting of the grand jury, WFAA reported from the court in the Dallas area. Officials for the prosecutors and a spokesman for Paxton were not immediately available for comment.

Paxton's spokesman has previously called the probe in Texas politically motivated. [ID:nL1N0ZI200]

Paxton drew national attention when he said county clerks in Texas who object to gay marriage on religious grounds can refuse to issue marriage licenses to same-sex couples despite June's landmark U.S. Supreme Court ruling requiring states to allow same-sex marriage. [ID:nL2N0ZE0HY]

When Paxton was in the state legislature, he was hired to seek clients by an investment firm called Mowery Capital Management, which is facing allegations from the State Securities Board of defrauding investors.

The Texas State Securities Board in May 2014 found that Paxton was not properly registered as an investment adviser in his work with the firm. It reprimanded him and fined him $1,000.

Paxton's name also appears in a federal court document as a major investor in a Dallas-area firm in a U.S. Securities and Exchange Commission investigation.

Court documents in the federal investigation of the technology firm called Servergy do not make any allegations of misconduct by Paxton or draw links to the investigation into securities fraud in Texas. [ID:nL1N0ZO0Y6]

(Editing by Bernard Orr)