In SEC case, Paxton lawyers zero in on Rep. Byron Cook

Fighting federal civil fraud allegations, Attorney General Ken Paxton is zeroing in on state Rep. Byron Cook's credibility in a new push to discredit the latest claims.

Texas Attorney General Ken Paxton entered a federal courthouse in Sherman on Sept. 2, 2016. Paxton's lawyers argued in a hearing that the federal civil fraud case against him should be dismissed.
Texas Attorney General Ken Paxton entered a federal courthouse in Sherman on Sept. 2, 2016. Paxton's lawyers argued in a hearing that the federal civil fraud case against him should be dismissed.  Cooper Neill for The Texas Tribune

Lawyers for Attorney General Ken Paxton are zeroing in on state Rep. Byron Cook, R-Corsicana, as they make a new push to discredit the latest allegations against Paxton brought by the U.S. Securities and Exchange Commission. 

In a filing Wednesday, Paxton's attorneys asked a federal judge in Sherman to force the SEC to produce notes from its interviews with Cook, who is among the technology company investors Paxton is accused of duping. Paxton faces similar, criminal charges at the state level, where he is getting ready for trial. 

The Sherman judge, Amos Mazzant of the Eastern District of Texas, dismissed the SEC's civil case against Paxton in October, concluding the commission had not shown Paxton had a "fiduciary duty" to tell investors he was receiving a commission. But the SEC revived the case by filing amended allegations two weeks later, arguing the group of investors had "established purposes, policies, and practices" that Paxton had apparently violated.

That was news to Paxton's lawyers, who say they had been told the arrangement among the investors was much less formal. According to the Wednesday filing, counsel for Cook and fellow investor Joel Hochberg had described the group as "an ad hoc arrangement where, from time to time, good friends might invest in the same transaction." 

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The suggestion in the Wednesday filing is that Cook, in an interview after the first complaint was filed, changed his story to make the arrangement seem more formal, bolstering the "fiduciary duty" argument. Adding to the drama: Paxton's lawyers say the SEC has already admitted to "steering" a witness in its interviews, an admission that came in its refusal to hand over case materials.

Terry Jacobson, a lawyer for Cook, denied the suggestion in the Wednesday filing. "He hasn't changed his story, and nobody has asked him to," Jacobson said. 

The SEC declined to comment.

Since the start of Paxton's legal troubles more than a year ago, he and his allies have suggested Cook is still bitter over the 2014 Republican primary for attorney general. Cook backed Paxton's opponent in that race, former state Rep. Dan Branch of Dallas.

"It's not a coincidence that the chief witness against me in these charges is a political adversary of mine," Paxton said in a video released ahead of a court hearing in May. "Some folks are still upset that their moderate candidate didn't win." 

That theme briefly surfaced again in the filing Wednesday, which noted Cook "is reported to have supported Mr. Paxton’s opponent in the Republican primary for the Attorney General nomination." 

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Mazzant has not yet ruled in the revived SEC case — Paxton's team wants oral arguments — but it's only half of the attorney general's legal problems. His trial on state criminal charges is expected to begin as early as next spring. 

Read related Tribune coverage:

  •  U.S. District Judge Amos Mazzant threw out the SEC case against Paxton in October, giving him a big legal victory.
  • The SEC revived its case against Paxton by filing amended allegations two weeks after Mazzant dismissed the initial charges.