The Charges
In July 2015 — just months into his first term as Attorney General — Paxton was indicted by a Collin County grand jury on two first-degree felony securities fraud charges and one third-degree felony for failure to register as an investment adviser. The charges stemmed from his involvement with Servergy Inc., a technology company. Prosecutors alleged Paxton solicited investors for the company, earning a commission of 100,000 shares of stock, without disclosing his financial interest or registering with the state.
Nine Years of Delays
What should have been a straightforward white-collar prosecution became a nearly decade-long saga of venue disputes, fee battles, and procedural wrangling. Paxton's legal team challenged the venue, fought over special prosecutor compensation, and filed motion after motion that pushed the trial date further out. First-degree felonies in Texas carry sentences of 5 to 99 years in prison.
The Pretrial Diversion
In March 2024, a pretrial diversion agreement was announced: Paxton agreed to 100 hours of community service, 15 hours of legal ethics courses, and approximately $271,000 in restitution. No plea was entered. His attorney stated there was no admission of guilt. Legal experts noted that ordinary defendants facing first-degree felony securities fraud charges rarely receive such terms.
Charges Dismissed
After completing the diversion program requirements, the three felony charges were formally dismissed in 2025. Paxton served as Attorney General for the entirety of his time under indictment — nearly his full tenure in office.
Two Systems of Justice
A typical defendant facing two first-degree felony charges would be arrested, booked, and arraigned promptly. Their trial would occur within one to two years. They might lose their job during proceedings. If convicted, they'd face 5 to 99 years in prison. Paxton continued serving as the state's chief law enforcement officer, delayed the case for nine years, and resolved it with community service.
Sources
- Collin County Court Records — indictment and case filings
- Texas State Securities Board records — investigation
- Dallas Morning News — original investigation reporting
- Texas Tribune — pretrial diversion coverage
- CBS Texas, Dallas Observer — charges dismissed