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The ruling in the
U.S. District Court for the Eastern District of Texas marks a
major victory for the Tea Party Republican who has denied
violating securities laws but still faces similar, though
criminal, state-level charges.
In April, the U.S. Securities and Exchange Commission (SEC)
charged Paxton over what the agency said was his role in a stock
scam that defrauded investors in a Texas-based technology
company called Servergy Inc.
The Commission accused Paxton of working to raise investor funds
for the company without disclosing his commissions.
U.S. District Judge Amos Mazzant rejected this view, writing in
a 29-page ruling that, "under the facts pleaded by the
Commission, Paxton did not have a legal obligation to disclose
his financial arrangement."
Paxton, in a written statement, said: "I appreciate the judge's
thorough review, and I am gratified by his dismissal of the
entire case."
The judge also gave the SEC two weeks to amend its complaint
with any additional facts that might revive their allegations.
The Securities and Exchange Commission did not immediately
responded to a request for comment.
(Reporting by Eric M. Johnson in Seattle and Nate Raymond in New
York; Editing by Sandra Maler)
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