Attorney General Ken Paxton’s securities fraud charges could be dropped under deal, according to report

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Lawyers in Ken Paxton's felony securities fraud case are in talks about a deal to drop the charges facing the Republican attorney general if he performs community service and pays restitution, according to the Austin American-Statesman.

Paxton could also have to take advanced legal education courses under a “draft agreement” that would allow him to skirt next month’s trial, the Statesman reported.

Paxton, who has been under indictment on two first-degree fraud charges and a third-degree charge since 2015, was scheduled for a final pretrial hearing on Tuesday ahead of an April 15 trial in Houston. He is accused of soliciting investors in a McKinney technology company more than a decade ago without disclosing that the firm was paying him to promote its stock. He is also charged with steering clients to a friend’s investment advising business without registering with the state securities board.

The case has been delayed by a number of disputes between Paxton’s attorneys and the special prosecutors handling the case, including over how much the prosecutors should be paid. The sides have also sparred over where the trial should take place.

Special prosecutor Brian Wice declined comment. Paxton attorney Dan Cogdell also declined comment, saying he “can’t comment on something that hasn’t happened and may well not happen.”

Paxton, who has denied wrongdoing, likely would not have to enter a plea under the draft agreement, the Statesman reported.

The securities fraud case is separate from the more recent allegations from former top deputies who claim that Paxton accepted bribes and abused the authority of his office to help a wealthy friend and donor, Austin real estate mogul Nate Paul. Those claims were at the heart of Paxton’s impeachment trial last year, in which he was acquitted by the Republican-controlled Texas Senate.

Paxton’s agency still faces a whistleblower lawsuit in Travis County stemming from the same corruption-related charges.

Meanwhile, the securities fraud case gained renewed momentum in November when Harris County District Judge Andrea Beall ended a dispute over back pay owed to Wice and a second prosecutor, Kent Schaffer, who has since stopped working on the case.

The Texas Court of Criminal Appeals in January declined to take up the pay issue, and Beall rejected Paxton’s attempt to toss the case last month, seeming to clear the way for an April trial.

Attorneys are expected to inform Beall Tuesday of the agreement to resolve the case, according to the Statesman.

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