Paxton sued EPIC City developers for securities fraud after the state securities board concluded the units were not securities
Paxton says EPIC City's developers violated Texas securities law. The state securities board says its staff concluded the units were not securities. Texas Monthly reports Abbott's advisers pressed for the referral; Abbott's office calls that routine.
Case period:
Published by The Dispute Index editorial teamPublished Updated
Overview
Texas Attorney General Ken Paxton sued the developers of the EPIC City housing project near Plano for securities fraud in December 2025. The Texas State Securities Board says its staff had concluded the project's land units were not securities and told Paxton's office so before he filed. A Texas Monthly report says advisers to Gov. Greg Abbott pressed the agency to refer the case.
Read the full background
The East Plano Islamic Center, a mosque in Plano, Texas, has been planning a 402-acre development in Collin and Hunt Counties, first called EPIC City and later the Meadow. Its development company, Community Capital Partners, raised money by selling units for $80,000 each that gave holders the right to buy lots at a discount. In early 2025, Gov. Greg Abbott and several state agencies announced investigations of the project, and Abbott wrote that "Sharia cities" were not allowed in Texas.
Under the Texas Securities Act, the attorney general can sue over securities violations only after a referral from the securities commissioner. On October 14, 2025, Paxton said his office had found violations and asked the Texas State Securities Board to refer the matter. On December 5, 2025, he sued the mosque, Community Capital Partners and several leaders, saying the suit followed a referral from the board.
Three days later, the board published a release saying its staff had concluded that, on the evidence available, the units were not securities under the act, and that Securities Commissioner Travis Iles had suggested a consumer-protection claim instead. The release said the board had provided its investigative file and asked the attorney general to take action as he deemed appropriate. Iles resigned as commissioner that month.
On October 12, 2026, Texas Monthly reported that advisers to Abbott had briefed Iles on an unsigned memo listing ways state agencies could act against the mosque, and later pressed him to make the referral. Abbott's press secretary told the magazine that state agencies are "ultimately accountable" to the governor. The securities case is scheduled for a jury trial in June 2027, according to Texas Monthly. We did not find a public response to the report from the attorney general's office as of October 17, 2026.
People in this case
Ken PaxtonDirectly involved
Greg AbbottDirectly involved
Timeline
7 timeline entries on this page. Dates: March 25, 2025 to October 12, 2026
March 2025
Abbott advisers brief securities commissioner on a memo about the mosque
Incident
Texas Monthly reports that an adviser and two lawyers for Abbott walked Securities Commissioner Travis Iles through an unsigned nine-page memo listing ways state agencies could act against the East Plano Islamic Center.
[01]How Greg Abbott and Ken Paxton Trumped Up Fraud Charges Against a Muslim Community
Texas Monthly investigation by Nicholas Gutteridge, based on internal emails, memoranda, calendars and interviews, including with former Texas securities commissioner Travis Iles. It reports how advisers to Gov. Greg Abbott were involved in state investigations of the East Plano Islamic Center and its EPIC City development, and includes a statement from the governor's press secretary.
State securities board opens investigation
Incident
The Texas State Securities Board opened an investigation into the East Plano Islamic Center and Community Capital Partners for potential violations of the Texas Securities Act.
[02]Texas State Securities Board
News release from the Texas State Securities Board, issued in the name of Securities Commissioner Travis Iles, responding to a December 5, 2025 Fox News article about the attorney general's EPIC City lawsuit. It describes the board's own investigation and its communications with the attorney general's office. The release no longer displays on the board's website; the archived copy shows it as published.
Texas Securities Commissioner Refutes Claims Made in Connection with Attorney General's EPIC City Lawsuit · Texas State Securities BoardFull release
October 2025
Paxton announces findings and asks for a referral
Claim
Paxton said his office had found that the EPIC City developers violated securities laws and asked the securities board to refer the matter to him for a lawsuit.
[03]Attorney General Paxton Uncovers Illegal Activities by EPIC City Developers and Requests Referral from State Securities Board to File a Lawsuit
Press release from the Texas Office of the Attorney General announcing its findings in the EPIC City investigation and asking the Texas State Securities Board to refer the matter back for a lawsuit.
[02]Texas State Securities Board
News release from the Texas State Securities Board, issued in the name of Securities Commissioner Travis Iles, responding to a December 5, 2025 Fox News article about the attorney general's EPIC City lawsuit. It describes the board's own investigation and its communications with the attorney general's office. The release no longer displays on the board's website; the archived copy shows it as published.
Texas Securities Commissioner Refutes Claims Made in Connection with Attorney General's EPIC City Lawsuit · Texas State Securities BoardFull release
December 2025
Paxton sues the mosque and its development company
Incident
Paxton sued the East Plano Islamic Center, Community Capital Partners and several of their leaders, alleging violations of Texas securities law.
[04]Attorney General Ken Paxton Sues East Plano Islamic Center to Stop Its Illegal Land Development Scheme
Press release from the Texas Office of the Attorney General announcing a lawsuit against the East Plano Islamic Center, Community Capital Partners and several of their leaders under Texas securities law.
Securities board says its staff found the units were not securities
Reaction
The securities board said a Fox News account of the commissioner's findings was false and that its staff had concluded the units were not securities under the Texas Securities Act.
[02]Texas State Securities Board
News release from the Texas State Securities Board, issued in the name of Securities Commissioner Travis Iles, responding to a December 5, 2025 Fox News article about the attorney general's EPIC City lawsuit. It describes the board's own investigation and its communications with the attorney general's office. The release no longer displays on the board's website; the archived copy shows it as published.
Texas Securities Commissioner Refutes Claims Made in Connection with Attorney General's EPIC City Lawsuit · Texas State Securities BoardFull releaseIles submits his resignation
Incident
Travis Iles submitted his resignation as securities commissioner two days after the board's release. Texas Monthly reports that the governor's office had asked him to resign.
[01]How Greg Abbott and Ken Paxton Trumped Up Fraud Charges Against a Muslim Community
Texas Monthly investigation by Nicholas Gutteridge, based on internal emails, memoranda, calendars and interviews, including with former Texas securities commissioner Travis Iles. It reports how advisers to Gov. Greg Abbott were involved in state investigations of the East Plano Islamic Center and its EPIC City development, and includes a statement from the governor's press secretary.
October 2026
Texas Monthly publishes its report
Source release
Texas Monthly reported that Abbott's advisers steered several state investigations of the mosque and pressed Iles to refer the securities case.
[01]How Greg Abbott and Ken Paxton Trumped Up Fraud Charges Against a Muslim Community
Texas Monthly investigation by Nicholas Gutteridge, based on internal emails, memoranda, calendars and interviews, including with former Texas securities commissioner Travis Iles. It reports how advisers to Gov. Greg Abbott were involved in state investigations of the East Plano Islamic Center and its EPIC City development, and includes a statement from the governor's press secretary.
Claims
Claims separate what was said from what is contested. Follow each source for the original wording and context.
What was said
Attributed statement
The Texas State Securities Board referred the EPIC City matter to the attorney general before he filed his securities lawsuit.
What is disputed
Paxton's office says the lawsuit followed a referral from the board. The board says it provided its investigative file and asked the attorney general to take action as he deemed appropriate, while telling his office that its staff did not find the units to be securities. Texas Monthly reports that the commissioner's written declaration did not say the units were securities.
Sources (3)
- Texas Securities Commissioner Refutes Claims Made in Connection with Attorney General's EPIC City Lawsuit · Texas State Securities BoardFull release
What's disputed
Disputed claim
Community Capital Partners, the developer of EPIC City, violated Texas securities law, including through fraudulent practices while soliciting funds.
What is disputed
Paxton makes this allegation in his December 2025 lawsuit. The Texas State Securities Board says its staff concluded that, on the evidence available to date, the units sold to buyers were not securities under the Texas Securities Act. The case has not gone to trial.
Sources (2)
- Texas Securities Commissioner Refutes Claims Made in Connection with Attorney General's EPIC City Lawsuit · Texas State Securities BoardFull release
Response record
Responses
Choose one response filter, or select All responses to see the full record.
4 responses. Newest first.
Greg AbbottGovernor of Texas, through press secretary Andrew MahalerisDirectly involvedBefore this statement
Press secretary Andrew Mahaleris gave the statement to Texas Monthly, describing state agencies as "ultimately accountable" to Abbott and saying the governor has been clear that entities seeking to impose Sharia law are not welcome in Texas.
"Governor Abbott will take action against any group that seeks to violate our Constitution and laws, regardless of faith."
Defended or excusedCase context: Paxton sued EPIC City developers for securities fraud after the state securities board concluded the units were not securities
Full statement and sources
Responding to Texas Monthly, Abbott's press secretary says the governor will take action against any group that violates the state's constitution and laws, regardless of faith.
After the statement
Texas Monthly reports that Mahaleris did not answer its other questions.
Why this label?
The reference point is the Texas government's pursuit of a securities fraud case against the EPIC City developers, including the role of the governor's advisers reported by Texas Monthly. The statement describes the advisers' involvement as routine and says the governor will act against any group that violates the law, so we labeled it Defended. The closest competing label is Challenged characterization; it loses because the statement does not dispute the reported facts and instead supports the actions taken.
This label describes the statement's response within the context above.
Texas State Securities BoardTexas state securities regulatorDirectly involved Before this statement
The board issued the release three days after the lawsuit, responding to a Fox News article that said Commissioner Travis Iles had identified violations and referred the case.
"After a months-long and thorough investigation, the staff in fact concluded that, given the evidence available to date, the sales of limited partnership interests did not constitute securities under the purview of the Texas Securities Act, despite being treated and marketed as such to investors."
Challenged the characterizationResponding to: Community Capital Partners, the developer of EPIC City, violated Texas securities law, including through fraudulent practices while soliciting funds.
Full statement and sources
The Texas State Securities Board says its staff concluded the EPIC City units were not securities under Texas law and calls a published account of the commissioner's findings false.
After the statement
The release says Iles advised the attorney general's office that claims might be more sustainable under the Texas Deceptive Trade Practices Act.
Texas Securities Commissioner Refutes Claims Made in Connection with Attorney General's EPIC City Lawsuit · Texas State Securities BoardFull releaseWhy this label?
The reference point is the Texas government's pursuit of a securities fraud case against the EPIC City developers. The board says its staff concluded the units "did not constitute securities under the purview of the Texas Securities Act" and that it told the attorney general's office so before the suit, so we labeled it Challenged characterization. The closest competing label is Condemned; it loses because the release disputes the legal theory and the account of the board's findings without denouncing the lawsuit itself.
This label describes the statement's response within the context above.
Ken PaxtonAttorney General of TexasDirectly involvedBefore this statement
Paxton's office announced the lawsuit against the East Plano Islamic Center, Community Capital Partners and several of their leaders.
"The leaders behind EPIC City have engaged in a radical plot to destroy hundreds of acres of beautiful Texas land and line their own pockets"
Defended or excusedResponding to: Community Capital Partners, the developer of EPIC City, violated Texas securities law, including through fraudulent practices while soliciting funds.
Full statement and sources
Announcing his lawsuit, Paxton says EPIC City's leaders plotted to destroy Texas land and enrich themselves, and that the project will be stopped.
After the statement
The release says the suit followed a referral from the Texas State Securities Board.
Why this label?
The reference point is the Texas government's pursuit of a securities fraud case against the EPIC City developers. Paxton announces the suit and says the project's leaders engaged in "a radical plot" to "line their own pockets", so we labeled it Defended. The closest competing label is Condemned; it loses for the same reason as his October statement: he is defending and pursuing the state's case.
This label describes the statement's response within the context above.
- Ken PaxtonAttorney General of TexasDirectly involved
Before this statement
Paxton announced the findings of his office's investigation of the EPIC City development in a press release and a public letter to the board's chair and commissioner.
"After a thorough investigation, it has become clear that the developers behind EPIC City flagrantly and undeniably violated the law"
Defended or excusedResponding to: Community Capital Partners, the developer of EPIC City, violated Texas securities law, including through fraudulent practices while soliciting funds.
Full statement and sources
Paxton says his office's investigation shows the EPIC City developers broke the law and asks the state securities board to refer the matter to him.
After the statement
He asked the board to review his office's findings and refer the matter back so his office could sue.
Why this label?
The reference point is the Texas government's pursuit of a securities fraud case against the EPIC City developers. Paxton says the developers "flagrantly and undeniably violated the law" and asks for the referral he needs to sue, so we labeled it Defended. The closest competing label is Condemned, since he condemns the developers; it loses because the conduct under scrutiny here is the state's case, which he is advancing.
This label describes the statement's response within the context above.
Sources
(4)
Reporting
How Greg Abbott and Ken Paxton Trumped Up Fraud Charges Against a Muslim Community
Relevant passage: Full article
About this source
Texas Monthly investigation by Nicholas Gutteridge, based on internal emails, memoranda, calendars and interviews, including with former Texas securities commissioner Travis Iles. It reports how advisers to Gov. Greg Abbott were involved in state investigations of the East Plano Islamic Center and its EPIC City development, and includes a statement from the governor's press secretary.
- Author
- Nicholas Gutteridge
- Published
- Accessed
Official statement
Attorney General Paxton Uncovers Illegal Activities by EPIC City Developers and Requests Referral from State Securities Board to File a Lawsuit
Relevant passage: Full release
About this source
Press release from the Texas Office of the Attorney General announcing its findings in the EPIC City investigation and asking the Texas State Securities Board to refer the matter back for a lawsuit.
- Author
- Office of the Attorney General of Texas
- Published
- Accessed
Official statement
Attorney General Ken Paxton Sues East Plano Islamic Center to Stop Its Illegal Land Development Scheme
Relevant passage: Full release
About this source
Press release from the Texas Office of the Attorney General announcing a lawsuit against the East Plano Islamic Center, Community Capital Partners and several of their leaders under Texas securities law.
- Author
- Office of the Attorney General of Texas
- Published
- Accessed
Official statement
Texas Securities Commissioner Refutes Claims Made in Connection with Attorney General's EPIC City Lawsuit
Relevant passage: Full release
About this source
News release from the Texas State Securities Board, issued in the name of Securities Commissioner Travis Iles, responding to a December 5, 2025 Fox News article about the attorney general's EPIC City lawsuit. It describes the board's own investigation and its communications with the attorney general's office. The release no longer displays on the board's website; the archived copy shows it as published.
- Author
- Texas State Securities Board
- Published
- Accessed
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Cite this record
- Publisher
- The Dispute Index
- Title
- Paxton sued EPIC City developers for securities fraud after the state securities board concluded the units were not securities
- First published
- Last updated
- Permalink
- https://disputeindex.com/cases/paxton-epic-city-securities-suit-regulator-dispute
The Dispute Index. "Paxton sued EPIC City developers for securities fraud after the state securities board concluded the units were not securities". First published: 2026-10-17. Last updated: 2026-10-17. https://disputeindex.com/cases/paxton-epic-city-securities-suit-regulator-dispute