"Felony securities fraud charges against Attorney General Ken Paxton to be dropped after nine years" was first published by The Texas Tribune, a nonprofit, nonpartisan media organization that informs Texans — and engages with them — about public policy, politics, government and statewide issues.

Sign up for The Brief, The Texas Tribune’s daily newsletter that keeps readers up to speed on the most essential Texas news.

HOUSTON — Prosecutors on Tuesday agreed to drop the securities fraud charges facing Attorney General Ken Paxton if he performs community service and fulfills other conditions of a pretrial agreement, bringing an abrupt end to the nearly nine-year-old felony case that has loomed over the embattled Republican since his early days in office.

The deal, which landed three weeks before Paxton is set to face trial, also requires him to take advanced legal education courses and pay restitution to those he is accused of defrauding more than a decade ago when he allegedly solicited investors in a McKinney technology company without disclosing that the firm was paying him to promote its stock. The total amount of restitution will be “somewhere a little bit south of $300,000,” prosecutor Brian Wice said.

Paxton, who will not have to enter a plea under the terms of the agreement, faced the prospect of decades in prison if he had been convicted of fraud. His status as a felon, based in part on an opinion he issued himself, would have likely barred him from running for office in the future.

The deal is the second major win for Paxton in roughly the last six months, after the Republican-controlled Texas Senate acquitted him last fall of 16 impeachment charges centered on allegations that he accepted bribes and abused the authority of his office to help a wealthy friend and campaign donor.

Still, Paxton’s legal troubles aren’t over. His agency is still facing a lawsuit brought by four former top deputies who argue that Paxton improperly fired them in 2020 for reporting him to the FBI. Those whistleblowers told law enforcement they believed Paxton was using his office to benefit Austin real estate mogul Nate Paul — the charges that formed the basis for Paxton’s impeachment last year and that are the subject of an ongoing federal investigation. He has denied all wrongdoing.

The securities fraud case, meanwhile, has been repeatedly delayed by disputes over where the trial should take place and how much the special prosecutors handling the case should be paid. The legal saga dates back to July 2015, when Paxton was indicted on three felony securities fraud charges just months into his first term as the state’s top lawyer.

Two of the charges — first-degree felonies — stemmed from allegations that Paxton persuaded investors, including a then-GOP state lawmaker, to buy at least $100,000 worth of stock in a tech startup, Servergy, without disclosing that he would be compensated for it.

He was also accused of steering clients to a friend’s investment advising business without registering with the state securities board, a third-degree felony.

Paxton has maintained his innocence and framed the case as a politically motivated witch hunt.

The fraud case began moving toward trial in November when Harris County state District Judge Andrea Beall declined to continue holding it up over a dispute about back pay owed to the special prosecutors.

The Texas Court of Criminal Appeals also declined to take up the pay issue, and Beall rejected Paxton’s attempt to toss the case last month, seeming to set the stage for an April 15 trial.

We can’t wait to welcome you to downtown Austin Sept. 5-7 for the 2024 Texas Tribune Festival! Join us at Texas’ breakout politics and policy event as we dig into the 2024 elections, state and national politics, the state of democracy, and so much more. When tickets go on sale this spring, Tribune members will save big. Donate to join or renew today.

This article originally appeared in The Texas Tribune at https://www.texastribune.org/2024/03/25/ken-paxton-plea-deal-securities-fraud-felony/.

The Texas Tribune is a member-supported, nonpartisan newsroom informing and engaging Texans on state politics and policy. Learn more at texastribune.org.