When a friend or business acquaintance pitches an investment as a surefire winner, there can be a question about when that cajoling crosses over from mere sales talk to fraud. A recent case in Texas involving the state’s attorney general, Ken Paxton, shows finding that line can be difficult.
The Securities and Exchange Commission sued Mr. Paxton in April for securities fraud related to his role promoting Servergy, a technology company that was also named as a defendant along with its founder and another person who solicited investors in the sale of approximately $26 million in private stock offerings. Mr. Paxton, who was elected attorney general in 2014 after serving in the Texas Legislature, was also indicted in state court for securities fraud and failing to register as an investment adviser.
via The Shadowy Line Between Friendly Sales Pitch and Deception – The New York Times
