Texas Attorney General Will Finally See His Day in Trial Court Over Securities Fraud Charges

Texas Attorney General Ken Paxton returned to a Houston courtroom, accompanied by an entourage of defense attorneys and security for the latest pretrial hearing in the securities fraud case against him.
Texas Attorney General Ken Paxton returned to a Houston courtroom, accompanied by an entourage of defense attorneys and security for the latest pretrial hearing in the securities fraud case against him. Photo by Reggie Mathalone
After over eight years of relocation debates and payment disputes, the ongoing securities fraud case against Attorney General Ken Paxton will go to trial in April.

State District Judge Andrea Beall set the date during a hearing on Monday, where Paxton was present. The attorney general arrived through the front door of the Houston courtroom and sat crouched over. Paxton did not speak and exited the courtroom quickly after proceedings on the case concluded.

Beall and lawyers on both sides also agreed upon a pretrial hearing on February 16; however, she said that the dispute over the payment for special prosecutors Brian Wice and Kent Schaffer will not be determined during a hearing.

Beall said she would decide on the matter on her own after defense attorney Bill Mateja brought forth a proposed order to challenge Beall’s decision. She added that opposing counsel should not determine how and when the prosecutors would get paid.

According to Wice, who spoke with reporters after the hearing, the same question was brought forth by another of Paxton’s attorneys, Philip Hilder, at an earlier pretrial hearing in August.

Schaffer said the attempt to defund the prosecutorial team was yet another way to try and delay the case from ever going to trial – which proved unsuccessful.

“They want to derail the payment because they know they could shut us down finally, where we can’t subpoena witnesses, we can’t bring witnesses to court, we can’t work on the case, because we’re not getting paid, so hopefully the case will just go away,” Schaffer said.

Wice said he thought that the defense attorneys’ goal was to get the prosecutors to withdraw so the case would return to the hands of a Republican judge who would dismiss it altogether.

When asked how much the prosecutors were owed, Wice said, “a lot.” He added that Beall had not told the prosecutorial team when she would be ruling.
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Special prosecutors, Brian Wice and Kent Schaffer, are still left in limbo over their compensation; however, Wice said he was undeterred and unwilling to withdraw from the case.
Photo by Reggie Mathalone
Hilder, who also addressed reporters after the hearing, said that the prosecutors' concern with their compensation was part of why the case had been held up in court proceedings for so long.

“It’s show-me-the-money,” Hilder said. “It’s all about the money to them.”

Hilder said that the $300 hourly rate the prosecutorial team previously requested did not abide by the law, which provides a fee schedule.

Hilder added that he expects motions filed between Monday’s hearing and the next pretrial setting set for Friday, February 16 – where these motions will be settled.
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At one point during Monday's pretrial hearing, state District Judge Andrea Beall joked that she was trying to accomodate all "100 lawyers" on the case.
Photo by Reggie Mathalone
Monday’s pretrial hearing was initially scheduled for the beginning of the month, October 6. The hearing was pushed back to Monday due to lawyers on the case having conflicting court dates.

This is Paxton’s second appearance in a Houston courtroom, following the first hearing in early August, where the defense attorneys and special prosecutors discussed possible motions.

These included a motion for a speedy trial by Paxton’s lawyers and a motion to determine prosecutorial pay. The years-long debate over where the case would end up left the special prosecutors without compensation since 2016, according to Wice.

The case originated from Collin County; however, it moved to Harris County amid concerns of impartiality in a county that Paxton represented for years in the State Legislature – and his wife, Senator Angela Paxton, now does too.

Despite this move, the case was returned to Collin County in 2020. This relocation was eventually overruled by the Texas Court of Criminal Appeals, which sent the case back to Harris County.

Although the case is back in Harris County, Wice and Cogdell said Collin County would still be responsible for the special prosecutors’ payments.

Monday’s hearing was the first time Paxton returned to a court over this case since the impeachment trial. Beall and lawyers on both sides had agreed during the August hearing that the outcome of the Senate’s proceedings could affect the next move in the securities fraud case.

Paxton was acquitted on 16 of the 20 articles of impeachment, and the remaining four – several of which were related to the securities fraud case – were later dismissed.

During the August hearing, Cogdell said if Paxton lost the impeachment trial, there would be more motivation to reach a quick resolution. Which he said could have resulted in a settlement.

Lawyers on both sides said the outcome of the securities fraud case could still be affected by another legal matter – an ongoing federal investigation into Paxton’s ties to Nate Paul, the Austin-based real estate developer. Many of the articles brought forth against Paxton regarded their ongoing business relationship and accusations that the attorney general was abusing his office to help Paul.

Paxton has pleaded not guilty to the two counts of securities fraud he faces, which include a first-degree felony for soliciting investors for a Dallas-based technology company without disclosing that the company was paying him to promote its stock and a third-degree felony for failing to register with state securities regulators.

If convicted on these charges, Paxton could face up to 99 years and a maximum of 10 years in prison, respectively. The attorney general could also lose his law license. The first day of the securities fraud trial will be Monday, April 15.
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Faith Bugenhagen is on staff as a news reporter for The Houston Press, assigned to cover the Greater-Houston area.