AUSTIN, Texas _ Texas' highest criminal court on Wednesday refused to hear Attorney General Ken Paxton's appeal of fraud charges, setting the stage for a trial that could begin as early as spring.
The Court of Criminal Appeals' decision, delivered without comment, was a severe setback to Paxton's pretrial bid to dismiss three felony charges linked to private business deals from 2011 and 2012, when Paxton was a member of the Texas Legislature.
A Paxton lawyer said he plans to ask the court to reconsider its decision, saying the charges against Paxton are "without merit."
The appeals court, however, rarely grants requests to rehear a rejected appeal.
"Today's ruling marks an end to Mr. Paxton's almost yearlong attempt to avoid being judged by a jury of his peers," prosecutor Brian Wice said. "We look forward to going to trial and seeking justice on behalf of the people of Texas."
Paxton faces up to 99 years in prison for two first-degree felony fraud charges that accuse him of touting Servergy Inc. without revealing to potential investors that the McKinney tech company was paying him to push its stock. A third charge accuses him of failing to register with state securities regulators, a third-degree felony.
The setback came five days after Paxton prevailed in civil court when a federal judge dismissed a lawsuit by the U.S. Securities and Exchange Commission that accused Paxton of fraud in his dealings with Servergy investors.
U.S. District Judge Amos Mazzant III said the SEC's allegations were not recognized under federal securities law, and he gave the agency until Oct. 21 to amend its lawsuit if it can find "additional facts" to support its accusations. The SEC was seeking fines and an order for Paxton to repay "ill-gotten gains" from the Servergy deals.
Paxton's appellate lawyer, Philip Hilder, said they will ask the Court of Criminal Appeals to reconsider its decision not to hear the appeal.
"We anticipate filing a motion for rehearing because we have tremendous confidence in our case," Hilder said. "The charges against Ken Paxton are without merit. A federal court, following a lower legal standard, ruled that the fraud charges were baseless."
In the criminal case, Paxton's lawyers told the Court of Criminal Appeals that he shouldn't have to stand trial on the charges because he was indicted by a Collin County grand jury that was incorrectly formed by a district judge.
In addition, defense lawyers argued that Paxton couldn't be charged with failing to register with state regulators because the law is unconstitutionally vague and because he was representing a company that had registered with the SEC, superseding his need to register with the state.
Paxton's trial judge and the Dallas-based 5th District Court of Appeals rejected versions of those arguments during previous attempts to dismiss the indictments, issued last summer by the grand jury.
