Paxton's sleazy financial advisor details emerge

Still can't believe that Texas Republicans elected a confessed felon the state's top law enforcer.

Ken Paxton earned thousands of dollars by referring his private legal clients to a financial adviser now accused of “unethical and fraudulent conduct” by the state, records obtained by The Dallas Morning News show.

Paxton, now Texas attorney general, did not tell them he was getting paid. He steered his clients to a financial adviser who had declared bankruptcy and who now faces losing his state license over questionable business dealings.

Paxton’s referral agreement with Frederick “Fritz” Mowery, the head of McKinney-based Mowery Capital Management, has created a yearlong political and legal headache for the Republican attorney general. He acknowledged last year, in the middle of his statewide campaign, that he violated state securities law by failing to register as an agent for Mowery. He paid a $1,000 administrative fine in April 2014.

Failing to register can also be a third-degree felony under state law. Complaints by a watchdog group have led to a Texas Rangers investigation and appointment of special prosecutors.

Because there's not a Public Integrity Unit in the Travis County DA's office any longer -- because the outside folks in charge will be under enormous political pressure to whitewash it -- Paxton isn't going to be investigated, unless you count the appearance of such as an actual one.  This is a similar arrangement to police internal investigations of shootings of unarmed black men.  "We investigated ourselves, and found we did nothing wrong."

A Paxton aide said Paxton was unaware of Mowery’s financial trouble and business conduct. Mowery, reached by The News, deferred to his lawyer, who declined to comment. In court proceedings, the attorney has acknowledged his client’s mistakes with paperwork and other matters but said he did not defraud his clients.

Court transcripts, documents and interviews reveal new details in what started as a verbal agreement between Paxton and Mowery in 2004. The two had met serving on a nonprofit board together, and both had offices in a small building in McKinney. Paxton agreed to send law clients looking for a financial adviser in Mowery’s direction. If they signed on as customers, Mowery would split their management fees with Paxton for as long as they remained clients.

But most of the clients say they were not told of the fee referral arrangement; nor was the state, as disclosure regulations require.

Just your basic financial-advisor ripoff.

In a five-day administrative court hearing in early March, the Texas State Securities Board alleged that Mowery engaged in misrepresentations, conflicts of interest and breach of fiduciary duties.

The allegations include that Mowery used a high-cost brokerage firm for his clients’ equity trades, and also had a separate business arrangement with that firm that paid him more than $1 million over seven years. The state contends the arrangement was a conflict of interest that could have cost his clients thousands of dollars in fees.

The two judges who heard the case against Mowery are likely to make their recommendations on sanctions, if any, to the State Securities Board this summer.

It gets a little slimier from there, if you can fathom that.  I predict an outcome that closely resembles Rick Perry's felony indictments on abuse of his office: "My friends looked into this matter and found no wrongdoing on my part".

Rick Perry is expected to announce he is running for president of the United States on June 4, less than three weeks from today.  Do you think that would be happening if he had any concerns whatsoever about going on trial?

That's Texas justice for ya.