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Speaker 1: Texas Attorney General Ken Paxxton is a champion of the

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Speaker 1: Tea Party who kept the Obama administration in court, suing

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Speaker 1: over executive immigration orders, the Clean Power Plan, and Labor

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Speaker 1: Department rulings. Now he's in court as a criminal defendant,

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Speaker 1: accused of securities fraud and failing to register as a

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Speaker 1: securities advisor. And Paxton suffered a double setback this week

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Speaker 1: as a judge ordered his trial moved out of his

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Speaker 1: home district and refused to dismiss his case. Bloomberg News

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Speaker 1: reporter Laurel Culkins has been following all Things Paxton. Laurel

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Speaker 1: tell us about the case against Paxton. Well, Paxton, as

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Speaker 1: you said, is accused of doing two things. One is

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Speaker 1: not telling investors that he was being compensated to recruit them,

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Speaker 1: and he was paid a hundred thousand dollars of stock

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Speaker 1: in a friends company to go out and find new

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Speaker 1: money for him. That's a felony violation if it's true.

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Speaker 1: The other thing he's accused of is actually a misdemeanor

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Speaker 1: failure to register with the state as an investment advisor.

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Speaker 1: To catch with that one is he's actually admitted doing that,

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Speaker 1: which for arts to a different set of investors back

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Speaker 1: in fourteen. At that time he paid a small fine

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Speaker 1: and went on to be elected Texas Attorneys General. Well, Laurel,

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Speaker 1: the judge kind of dealt him a couple of blows recently.

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Speaker 1: What what did the judge rule in his case? Well,

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Speaker 1: the judge the biggest thing the judge did was take

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Speaker 1: away his home court advantage. Uh and uh. Under Texas rules,

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Speaker 1: you have a public official on a corruption count and

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Speaker 1: a securities violation like this, you have to be tried

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Speaker 1: in your home county. Well, his home county UH backs

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Speaker 1: him pretty heavily. He's been elected there by wide margins,

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Speaker 1: and he knows every county official there. And the allegation

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Speaker 1: was that his political backers had been waging a publicity

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Speaker 1: campaign against the prosecutors personally and in favor of of

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Speaker 1: Ken Paxton to try to make people think it was

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Speaker 1: a political witch hunt, which is kind of funny because

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Speaker 1: if the charges are brought in his home county, which

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Speaker 1: is a very Republican district, it would hardly be seen

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Speaker 1: as a political witch hunt. Was away his home court advantage.

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Speaker 1: There's something really unusually here. Prosecutors complaining that they're not

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Speaker 1: being paid tell us about that right, that is rather unusual. Uh.

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Speaker 1: The prosecutor in the home county had to recuse himself

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Speaker 1: and step aside because he was a friend of Paxton's.

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Speaker 1: So uh, they brought in special prosecutors from outside the

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Speaker 1: state outside I'm not outside state, I'm sorry, outside the district,

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Speaker 1: and they agreed to take a haircut on their own

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Speaker 1: personal rate to do the state of favor and investigate

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Speaker 1: Ken Paxston. Well, once a year they've been submitting invoices

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Speaker 1: to the local county to get paid. They got paid

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Speaker 1: the first time, but then when they submitted their invoices

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Speaker 1: for the county balked and some of Paxiston's supporters are

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Speaker 1: believed to be behind that effort to stop the prosecutor's paychecks.

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Speaker 1: The prosecutors said, well, we're not gonna work for free,

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Speaker 1: so uh, maybe you need to replace us and you know,

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Speaker 1: get somebody who will work for free, or maybe stop

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Speaker 1: the case until that time we get paid. That issue

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Speaker 1: still up in the air, but the judge yesterday refused

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Speaker 1: to stop the case. So it's gonna remains to be

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Speaker 1: seen where the prosecutors or work for free now and

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Speaker 1: go ahead and try Paxton or whether some deal can

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Speaker 1: be made to get paid. Well, how serious are the

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Speaker 1: charges against Paxton? What's he really facing here? Well, it

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Speaker 1: seems like a rather small offense, but it actually carries

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Speaker 1: a risk of ninety nine years in prison if he's

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Speaker 1: convicted on all accounts. So, uh, he could lose his

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Speaker 1: law license even if he's convicted on the misdemeanor I

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Speaker 1: believe on failure to register. Um. So it's not clear

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Speaker 1: that if he loses his law license whether he'd have

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Speaker 1: to step down as Texas Attorney General. But clearly if

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Speaker 1: he's convicted on the felony accounts, he would lose that

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Speaker 1: as well as go to prison. Laurel a federal judge

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Speaker 1: dismissed similar civil allegations by the U S Security regulators.

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Speaker 1: Does that augur well for him in this case? Well,

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Speaker 1: he certainly wants everyone to think that it will. The

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Speaker 1: federal standard with a little bit different um. First of all,

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Speaker 1: it was a civil case, not a criminal case, so

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Speaker 1: the burden of proof is a bit different, and the

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Speaker 1: rules were a bit different. The federal judge said, well,

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Speaker 1: you didn't break federal securities laws even though you had

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Speaker 1: an ethical duty to tell the investors that you were

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Speaker 1: being paid to recruit them um under state securities laws.

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Speaker 1: It remains to be seen whether jury thinks that's against

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Speaker 1: the law or not. Laurel Coukins, it's a pleasure to

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Speaker 1: talk to you again. We haven't talked since ex On,

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Speaker 1: that's how long ago it was. But your reports are

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Speaker 1: always fabulous, especially she covers everything about Texas. She knows

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Speaker 1: all about the Texas courts. Michael, So, coming up on

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Speaker 1: Bloomberg Law, we're going to be talking about what the

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Speaker 1: National Institute of Justice has called this nation's silent mass disaster,

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Speaker 1: eighty five thousand missing people. And we'll talk to a

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Speaker 1: lawyer who helps the families of the missing get through

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Speaker 1: the legal complications that can entangle their lives for years. Michael.

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Speaker 1: People don't realize that when someone goes missing, it throws

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Speaker 1: the family into a complete limbo. There are thousands of

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Speaker 1: people in the country who who faced this and it's

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Speaker 1: sort of one of these great unknown problems. And yeah,

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Speaker 1: if you if somebody disappears in your family and you're

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Speaker 1: supposed to get life insurance or you need to continue

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Speaker 1: their health coverage or whatever, how do you do it

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Speaker 1: if nobody knows where they are we're going to find

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Speaker 1: out from a lawyer who's been helping people do this