Ken Paxton’s Attorneys|Fight Felony Charges

     DALLAS (CN) — Attorney General Ken Paxton’s attorneys told a Texas appeals court Thursday that it should dismiss felony securities fraud charges against him because a trial judge bungled grand jury selection by asking for volunteers.
     Paxton, a Republican, was charged in Collin County in August 2015 with two first-degree felony counts of securities fraud and a third-degree felony count of failing to register with the Texas State Securities Board.
     Paxton paid a $1,000 fine in 2014 after he admitted he solicited clients for a friend’s investment firm without being registered as an investment advisor. Paxton was a member of the Texas House at the time. The Texas Rangers then investigated.
     Prosecutors say Paxton urged investors in 2011 to invest $600,000 in technology firm Servergy without telling them he would earn a commission on it, and misrepresented that he was investing in the McKinney-based company.
     Tarrant County Judge George Gallagher refused to dismiss the indictments in December, resulting in an appeal to the Fifth District Court of Appeals in Dallas.
     Paxton’s attorney, William Mateja with Polsinelli in Dallas, told the nine-member appeals court that Collin County Judge Chris Oldner erred when he asked prospective jurors who among them wanted to serve on the grand jury.
     “The fact of the matter is that any grand jury that was empaneled using a volunteer system in Texas is illegal,” Mateja said outside the courtroom. “The Texas Legislature has said there is a ‘cookie cutter’ approach that judges need to take by going through grand juror by grand juror [and determine] whether or not they are qualified to serve. In this case, it simply did not happen.”
     Chief Justice Carolyn Wright asked Mateja if the appeals court voids the grand jury, whether “every case decided by this grand jury is also void and every case in the state where a judge has asked grand jurors to volunteer would also be void.”
     “The answer is yes, absolutely,” Mateja answered. “Better to nip it in the bud now than to let this problem fester.”
     Special prosecutors Kent Schaffer and Brian Wice flatly disagreed, saying the randomness of prospective grand jurors was preserved despite the request for volunteers.
     “Just because he asked for volunteers, it doesn’t make things less random,” Schaffer said. “The randomness was in the way they were brought into the courthouse to begin with, the way they were assembled in the courtroom.”
     Accompanied by his wife after the hearing, Paxton said he thought the proceeding “went very well.” He said he was “confident in the legal process” and the people of Texas.
     “I think my attorneys showed some of the flaws in the case,” he said. “I just want you to know these are false charges and we will prevail.”
     The Securities and Exchange Commission entered the fray in April when it filed a civil suit against Paxton and others in Dallas Federal Court, closely mirroring allegations in the criminal case: that he hid compensation he was given for touting Servergy.
     The Thursday hearing came hours after Paxton posted a video on YouTube, in which he denounced the criminal and civil cases against him as retaliation by his political opponents and President Barack Obama.
     The appeals court is expected to rule sometime within three months.

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