Ken Paxton criminal case can proceed, appeals court says

A state appeals court has rejected Texas Attorney General Ken Paxton’s request to dismiss criminal charges against him, moving the state’s top lawyer one step closer to trial on three alleged felonies related to private business deals in 2011 and 2012.

The unanimous decision by the Dallas-based 5th Court of Appeals came less than three weeks after oral arguments in the case — an unusually rapid decision by an appeals court — and was Paxton’s second such defeat in the courts after state District Judge George Gallagher in December denied a similar bid to have the charges dismissed before trial.

After the Wednesday evening ruling, Paxton’s lawyers said they will consider asking the state’s highest criminal court to review and overturn the 5th Court’s decision.

“The court did not hold that Mr. Paxton’s main claims were without merit, rather were premature at this stage of the proceedings,” Paxton lawyer Philip Hilder said. “Respectfully, we disagree that these fundamental flaws cannot be challenged pretrial and will evaluate in coming days whether to raise these issues with the Court of Criminal Appeals.”

Paxton’s prosecutors issued a statement expressing confidence that any further appeals would be rejected “as surely and as swiftly as the court of appeals did.”

“We are gratified but not surprised that just three weeks after oral argument, the (5th) Court of Appeals unanimously concluded that Mr. Paxton’s claims were clearly without merit,” said a statement from prosecutors Kent Schaffer, Brian Wice and Nicole DeBorde.

Paxton has pleaded not guilty to felony counts of securities fraud and one felony count of failing to register with the State Securities Board.

ANALYSIS: Why Ken Paxton’s appeal could have limited impact.

The fraud charges accused Paxton, a Republican from McKinney, of offering to sell stock in Servergy Inc. to two investors — state Rep. Byron Cook, R-Corsicana, and Florida businessman Joel Hochberg — while failing to disclose that he was paid 100,000 Servergy shares to sell stock in the McKinney tech company.

In addition, the U.S. Securities and Exchange Commission in April filed a civil lawsuit accusing Paxton of fraud related to his actions on behalf of Servergy.

Paxton recently released a video proclaiming his innocence and calling the charges politically motivated.

The all-Republican 5th Court of Appeals, however, rejected Paxton’s claims that the charges should be dismissed because the Collin County grand jury that indicted Paxton was improperly formed. The judge who formed the panel didn’t undermine the random nature of the grand jury by asking for volunteers or those willing to serve, the court said.

In a concurring opinion, Justice Robert Fillmore added that Paxton failed to show that he had been harmed by the all-volunteer grand jury.

The appeals court also rejected three separate challenges to the law that prosecutors said required Paxton to register as an investment adviser representative with state securities regulators. In 2014, Paxton agreed to a securities board reprimand and $1,000 fine for failure to register, but he now argues that additional research shows that the requirement didn’t apply to him.

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