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Texas Attorney General Ken Paxton had an investment opportunity: a tech startup making data servers. He told people he had put his own money into Servergy Inc., according to prosecutors, and helped persuade a state lawmaker and another wealthy businessman to buy more than $100,000 in shares.
 
All the while, Paxton was actually being compensated by Servergy, according to an indictment unsealed Monday, the same day the state's top law enforcement officer turned himself into jail on securities fraud charges. The alleged deception took place before Paxton took office in January. If convicted, the rising Republican star could face five to 99 years in prison.

It was a low moment for a tea-party favorite who is barely seven months on the job, and whom GOP presidential candidate Ted Cruz candidate called a "tireless conservative warrior" when Paxton ran for office last year.

Attorneys for Paxton, 52, said he will plead not guilty to two counts of first-degree securities fraud and a lesser charge of failing to register with state securities regulators.

"He is looking forward to the opportunity to tell his side of the story in the courtroom," said Dallas attorney Joe Kendall, adding that a judge instructed Paxton's lawyers not to comment further.

A frenzy of media outside the Collin County jail in Paxton's hometown was reminiscent of a year ago, when then-Texas Gov. Rick Perry was booked after being indicted on charges of abusing his power with a 2013 veto. But whereas Perry defiantly welcomed the cameras at jail, Paxton ducked reporters after his booking, driving away in a black SUV.

Nor did top Texas Republicans rush to Paxton's side with the same outrage as they did with Perry, whose case has not yet gone to trial. Republican Gov. Greg Abbott, who last held the attorney general job, issued only a brief statement that urged the justice system to play out.



Leaders of the Republican-controlled General Assembly say they are rejecting Democratic Gov. Terry McAuliffe's pick for the Virginia Supreme Court in favor of a their own selection.
 
House Speaker William J. Howell and Senate Majority Leader Thomas K. Norment, Jr. said late Sunday that the legislature plans to appoint Rossie D. Alston Jr. to the high court during an upcoming special session.

Alston is currently a member of the Virginia Court of Appeals. His appointment would mean the dismissal of Jane Marum Roush, who McAuliffe appointed late last month.

Republicans said they have no qualms with Roush's qualifications. But Republican Del. Greg Habeeb said the General Assembly has the ultimate authority on appointing judges and McAuliffe did a poor job of consulting with GOP leaders before making his selection.



A British jury has found a former Citibank and UBS trader guilty of being the ringmaster in the manipulation of a key interest rate, the London Interbank Lending Rate, or Libor.

The jury on Monday found 35-year-old Tom Hayes, who specialized in products pegged to yen-denominated Libor, guilty of manipulating the rate from 2006 to 2010. He was charged with conspiring with other traders — but he says he was made a scapegoat for a common practice.

Libor is a key rate that banks use to borrow from each other. Revelations that it was rigged shook the markets because the rate affects what people pay when they take out loans, such as a car loan.

Hayes is the first to be convicted by a U.K. jury of Libor rigging.



Tom Brady's lawsuit against the NFL in which he wants his four-game suspension overturned will be heard in New York instead of Minnesota.

Brady and the players' union filed their suit Wednesday in Minnesota. But the NFL already had filed papers Tuesday in New York, moments after announcing that Commissioner Roger Goodell upheld the suspension for Brady's involvement in the use of underinflated footballs in the AFC championship game.

U.S. District Judge Richard Kyle, based in Minnesota, ordered the transfer.

The judge wrote that he "sees little reason for this action to have been commenced in Minnesota at all."

He noted that Brady plays in Massachusetts, the union is headquartered in Washington and the NFL in New York, Kyle added that "the arbitration proceedings took place in New York and the award was issued in New York."

Jeffrey Kessler, the lead attorney for Brady and the union, wasn't concerned about this game of musical witness chairs.




The U.S. Department of Justice released a report critical of the St. Louis County Family Court on Friday, finding that black youths are treated more harshly than whites, and juveniles are often deprived of constitutional rights. Though unrelated to the department's investigation in Ferguson, the new report again raises concern about racial discrimination and profiling in the St. Louis region.

The investigation from the Justice Department's Civil Rights Division was initiated in 2013 amid complaints that black youths were treated unfairly in the family court, which handles about 6,000 youth cases each year. Treatment of African-Americans in the region drew increased scrutiny last year after the fatal shooting of 18-year-old Michael Brown, who was black, by a white police officer in Ferguson. The 60-page report arrived just over a week before the anniversary of Brown's death, Aug. 9.

"In short, black children are subjected to harsher treatment because of their race," Assistant Attorney General Vanita Gupta wrote in a letter to Gov. Jay Nixon, St. Louis County Executive Steve Stenger and Family Court Administrative Judge Thea Sherry. She called the findings "serious and compelling."

Nixon called the report "deeply concerning." Though in St. Louis County, the court is supervised by the Missouri Supreme Court. "All Missourians have a right to a fair and equitable justice system, and our young people are no exception," Nixon said in a statement.

Stenger said he will urge the court "to work with the state of Missouri to fix the glaring problems identified by the Department of Justice."

The report said the Justice Department will seek to resolve complaints through negotiations, though litigation remains possible. Gupta said at a news conference that an initial meeting with family court officials was "cordial and cooperative."

The department is taking a similar tack as after a report released in March alleging racial bias and profiling by police and the municipal court in Ferguson. That report was begun following Brown's death, and negotiations between the DOJ and Ferguson officials are still going on.



The man accused of slaying nine parishioners as they worshipped at a South Carolina church was expected in court Friday to face dozens of federal charges, including hate crimes and obstructing the practice of religion.

Dylann Roof, 21, was scheduled to be arraigned in Charleston. The hearing, which was expected to be brief and would be his first appearance in federal court, was originally set for July 27 but was rescheduled to allow attorneys more time to prepare.

The federal prosecution, particularly on hate crimes, has been expected since the June 17 shootings at Emanuel African Methodist Church. Early on, officials with the U.S. Department of Justice said they felt the case met the qualifications for a hate crime, and Roof was indicted by a federal grand jury about a month after the killings.

Roof, who is white, appeared in photos waving Confederate flags and burning and desecrating U.S. flags. Federal authorities have confirmed his use of a personal manuscript in which he decried integration and used racial slurs to refer to blacks.

Because South Carolina has no state hate-crimes law, federal charges were needed to adequately address a motive that prosecutors believe was unquestionably rooted in racial hate, U.S. Attorney General Loretta Lynch said during a news conference announcing Roof's federal indictment.

Roof faces 33 federal charges in all, some of which could potentially carry the death penalty. The Justice Department has not decided whether it will seek the death penalty against Roof, nor whether its prosecution will come before a state case that includes murder charges and another potential death penalty prosecution.



A bankruptcy court that ruled lawsuits against Caesars Entertainment Corp. would not be halted as the company's debt-heavy subsidiary attempts to emerge from Chapter 11 has also denied the casino company's effort to fast-track an appeal of the decision to a higher court.

The order was denied Wednesday in Judge Benjamin Goldgar's federal courtroom in Chicago according to court records.

A Caesars Entertainment attorney has argued the fate of its bankrupt operations subsidiary and its own financial well-being are at risk if creditor lawsuits seeking billions of dollars in claims proceeds.

The creditors suing Caesars allege the company robbed its subsidiary of valuable assets and left them without a guarantee on their investments.

Caesars Entertainment Corp. has argued the litigation puts Caesars Entertainment Corp. at risk of filing bankruptcy itself.


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