Sources of Income
Paxton, who was elected attorney general in 2014, has been a partner at Pittenger, Paxton, Nuspl & Crumley, where he specialized in estate planning, probate, real estate and general business matters. He has also owned and operated a title company in McKinney.
In addition to being a part of three law firms — Ken Paxton, Paxton & Pratt LP, KP & DP LLC — Paxton has been a fee agent at Chicago Title. He also reports interest in Plano's KEP Belclaire Parking LTD, RSKA Holdings LTD in McKinney, Burleson Future Investments, Washington 1417 LP in McKinney, Pirin Electric in Beaumont, El Dorado Colin LP in Plano and Enforcement Video LP in Plano. He also has interest in Cornstar Media Fund in Dallas.
Paxton owns two businesses in Dallas: Bonus Building Care and Realty America Group Investments. He also owns Premiere Vertical Properties, a cell tower in McKinney.
Residence in McKinney valued at $677,600
According to a 2008 Associated Press report, Paxton had early investments in WatchGuard, a digital technology company founded in 2002 that was able to flourish nationally after a boost from a 2006 Texas Department of Public Safety contract worth $10 million to outfit all state trooper vehicles. State Rep. Byron Cook also invested in the company and sat on its board. Both lawmakers voted for spending bills that gave state business to the company, and profited when they later sold their shares. Paxton did not disclose his ownership in WatchGuard on his 2008 personal financial statement filed with the Texas Ethics Commission, though he had previously disclosed ownership in Enforcement Video LP, the registered company name for WatchGuard Video. In an AP interview, Paxton described himself as a minor investor with no influence over the company, and said he didn't even know it had contracts with the state. "I don't have time to spend tracking every investment I make," he said.
Paxton amended nine of his personal financial statements in April 2014 to correct omissions in his disclosures, all of them related to his service on nonprofit boards. The corrected disclosures followed a Texas Tribune investigation into business and professional relationships that Paxton had not disclosed. A Paxton spokesman said he took the disclosure lapses seriously and "took immediate action where necessary."
Paxton violated the Texas Securities Act by soliciting investment clients without being registered as required by law. He was “reprimanded” and fined $1,000 after The Texas Tribune obtained 2006 letters showing the McKinney lawmaker was being paid to solicit clients for a North Texas financial services firm at a time when he was not registered with the State Securities Board. Paxton called it an oversight and said he worked to correct the situation as soon as he became aware of it.
- In July 2015, two special prosecutors announced they were pursuing first-degree felony charges against Paxton for violating the Securities Act. Later that month, a federal probe was launched into Servergy Inc., a company where Paxton was a listed investor, for being suspected of “potential misstatements” regarding pre-orders for the servers from the online retailer Amazon and semiconductor giant Freescale. Paxton owned at least 10,000 shares in Servergy, according to a 2014 personal financial statement.
- In Aug. 2015, Paxton was indicted by a Collin County grand jury on three charges, including three felony counts — two for securities fraud and one for acting as an investment representative without registering. Paxton was also accused of selling two people — one of them state Rep. Byron Cook, R-Corsicana — more than $100,000 worth of stock in Servergy without disclosing that he would make a commission or had a personal investment in the company. Paxton pleaded not guilty for the three charges faced in his criminal case; his trial is set to being in May 2017.
- In April 2016, Paxton was charged in federal court with securities fraud, similar to the allegations the attorney general faced at the state level. The civil charges, filed by the U.S. Securities and Exchange Commission, alleged Paxton persuaded five investors to funnel $840,000 into Servergy. In October, a federal judge threw the case out, but the SEC rebooted the federal charges against Paxton two weeks later by filing amended allegations against the attorney general.