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Texas Attorney General Warren Paxton Subject of SEC Complaint for Fraudulently Promoting Investments

2016-07-06

Texas’ new Attorney General is Warren Paxton, said to be a Tea Party- aligned politician; he previously served in the Texas House for ten years and in the State Senate for two years.  He received contributions of nearly $1 million from oil and gas companies when he ran for office in the Texas House and Senate.

Mr. Paxton made the news when he successfully sued a Virgin Islands Attorney General for sending a subpoena to Exxon Mobil demanding internal documents regarding its knowledge, and denial of, anthropogenic global warming.  The premise of the subpoena was that Exxon was committing fraud by attempting to profit from its denial of AGW.  The subpoena was withdrawn, a victory for Paxton, but this has brought unwelcome attention to Mr. Paxton himself.

It seems that, starting in 2011, Mr. Paxton promoted the sale of stock in a company called Servergy, which was developing a computer server that it claimed was a direct competitor to servers produced by such giants as Dell.  Unfortunately, this server was already obsolete ( a 32-bit model when all new servers are 64-bit.)  To make it a perfect fraud, Mr. Paxton never disclosed to his prospective investors that he was being compensated for his work, and he knew (or should have known) that Servergy was creating pre-orders for its server out of whole cloth.

In April, the Securities and Exchange Commission filed a complaint against Mr. Paxton and others for fraud.  The complaint makes for interesting reading and shows what a grimy, two-bit hustler Mr. Paxton really is.  His (temporarily) successful lawsuit against the Attorney General of the Virgin Islands was filed at the behest of his corporate paymasters, including Exxon.  He twists his mandate as a State Attorney General when he involves himself in a suit by another AG against a private company.

We can only hope that the proceedings against Exxon by several State Attorneys General will continue, as there is considerable evidence that Exxon knew (or should have known) that its oil products were contributing to AGW and that it deliberately deceived its customers about the risks of global warming.  Read about Exxon’s fight for the right to deny global warming in Wired.

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