Texas' Republican attorney general Ken Paxton still faces felony criminal charges for securities violations. Now his wife, a state senator, wants to give his office more power over the securities industry.
Texas state Sen. Angela Paxton, a Republican who just happens to be the wife of the sitting state Attorney General Ken Paxton, has introduced a bill to increase the power of her husband's office in a way that uniquely benefits her husband.
Back in July 2015, while he was already the sitting attorney general of Texas, Paxton was indicted on three separate securities fraud felonies. One of those was a charge for acting as an investment adviser when he wasn't registered. Paxton was soliciting clients and taking a commission for those clients, but he had never registered to do so with the state securities board.
Paxton has already faced civil consequences, having been disciplined by the Texas State Securities Board. He's still awaiting his criminal trial, but has managed to get the trial pushed back several times. The last trial date was for December 2017, but that date came and went — and Paxton made it through the 2018 election while still under indictment.
Paxton's wife is now a sitting state senator, having just gotten elected in 2018. And one of her very first efforts upon taking office was to introduce a bill that expands the power of the attorney general to allow people to work as investment advisers without having to register with the state securities board.
In other words, Angela Paxton wants to give her husband the power to exempt people from having to follow the rule that led to his existing criminal charges.
The ostensible idea behind the bill is that it helps the financial tech sector by letting entrepreneurs apply to the attorney general's office for an exemption to push their products rather than having to go through the existing securities registration process.
Angela Paxton also comically declared that her bill would strengthen consumer protection. It is unclear how a measure that would exempt advisers from basic regulations would somehow protect the customers of those advisers.
Indeed, Angela Paxton engaged in some very impressive doublespeak to justify that view:
The state agencies that have regulatory oversight of financial institutions and consumer protection laws will provide appropriate regulatory support within the sandbox to ensure that consumers are protected.
Actual securities experts disagree with her, noting this is a "fairly aggressive" exception that gives an "uncomfortable level" of discretion to the attorney general.
It also removes the approval process from the state securities specialists — the people who are experts in approving such things — and gives it to Ken Paxton, who is not at all an expert.
Even if this were an incredibly innovative and necessary move, you'd think that both of the Paxtons would stay far away from it, given how unsavory it all seems.
But you'd be wrong.
Published with permission of The American Independent Foundation.