Texas Coalition on Lawyer Accountability (TCLA) Files Suit Against Texas State Securities Board for Failure to Release Documents Regarding Attorney General Candidate Ken Paxton

Today the Texas Coalition for Lawyer Accountability (“TCLA”), through its Acting Executive Director, Erica Gammill, is filing a lawsuit against the Texas State Securities Board (“SSB”) to obtain disclosure of public records relating to Ken Paxton.[1] Sections 28A and 28B of the Texas Securities Act allow a court to order release of the documents sought for “good cause shown.” Good cause for disclosure exists for two reasons. You can download the Original Petition filed today, here.

First, Mr. Paxton is a lawyer, and on August 5, 2014, Plaintiff filed a grievance against Mr. Paxton because he violated the Texas Disciplinary Rules of Professional Conduct. The documents withheld by the SSB contain important evidence relevant to those disciplinary charges. Paxton’s violations include:

*(1) Disciplinary Rule 8.04(a)(2), which prohibits a Texas lawyer from committing “any . . . criminal act that reflects adversely on the lawyer’s honesty, trustworthiness, or fitness as a lawyer in other respects,” and

*(2) Disciplinary Rule 8.04(a)(3), which prohibits a Texas lawyer from engaging in conduct involving “dishonesty, fraud, deceit, or misrepresentation.”

Mr. Paxton violated Disciplinary Rule 8.04(a)(2) by committing a third degree felony. On May 2, 2014, Texas Securities Commissioner John Morgan signed a Disciplinary Order against Mr. Paxton. The Order found that Mr. Paxton had acted as a paid investment adviser representative for Mowery Capital Management, LLC (“MCM”) without registering, as required by the Act. Mr. Paxton acknowledged under oath the truth of the factual findings in the Disciplinary Order. Section 29I of the Act makes it a third-degree felony to render any service as an unregistered investment adviser representative. Thus, Mr. Paxton admitted under oath to facts constituting a felony.

Mr. Paxton violated Disciplinary Rule 8.04(a)(3) by taking secret, illegal kickback-commissions for referring his clients (the Goettsches) and Mr. Goettsche’s brother to Frederick Mowery and Mowery Capital Management. Mr. Paxton received 30 percent of all investment-adviser fees that Mowery charged them. The Goettsches lost some $250,000 in the investments. Mr. Paxton also concealed from the Goettsches that Mr. Mowery went bankrupt. (Most investors would have qualms about investing with a bankrupt investment advisor. The man whose business they invested with also went bankrupt.)

Second, good cause also exists because Plaintiff and all Texas voters deserve to have access to the documents and records that shed light on Mr. Paxton’s unethical and criminal misconduct. Any person who wants to occupy the high office of Texas Attorney General should exhibit the highest standard of personal and professional integrity. To the extent that Mr. Paxton apparently falls far short of that standard, the voters are entitled to know exactly what he did. Indeed, if Mr. Paxton favors transparency, honesty, and an informed electorate, he should join in Plaintiff’s request that the Texas State Securities Board release the documents requested.


The Texas Coalition on Lawyer Accountability (TCLA) is a nonprofit 501(c)(3) organization dedicated to educating the public and advocating the public interest to hold the Texas Legal profession accountable to its statutory, constitutional, and ethical obligations. Coalition members include the Mexican American Legal Defense and Education Fund (MALDEF), Public Citizen, the Environmental Defense Fund (EDF), the Southwest Voter Registration Education Project (SVREP), the Texas Civil Rights Project (TCRP), and the Texas Housing Justice League (THJL). TCLA filed the disciplinary complaint that resulted in disbarment of Ken Anderson for his misconduct in the Michael Morton case. 


[1] On August 21, 2014, TCLA submitted its original document request to the SSB, asking for documents concerning SSB’s investigation of Mr. Paxton and Mr. Mowery and his company. On September 5, 2014, the SSB refused to release portions of the requested records, claiming confidentiality under the Texas Securities Act and the Texas Public Information Act.