Attorney General Ken Paxton and the Texas State Securities Board are at odds over a lawsuit Paxton filed targeting a large Muslim‑centric residential development in the Dallas–Fort Worth market, formerly known as Epic City and now called The Meadow.
The project, led by the East Plano Islamic Center and Community Capital Partners, would build more than 1,000 homes, a mosque, a K‑12 faith‑based school, senior living facilities, apartments, clinics, retail, a community college and sports fields across 402 acres in Collin and Hunt counties, The Dallas Morning News reported.
The lawsuit alleges that Community Capital Partners, led by Imran Chaudhary, and affiliated entities engaged in an illegal development scheme by selling unregistered securities in violation of the Texas Securities Act.
According to the attorney general, investors were required to purchase an $80,000 limited partnership share in CCP to reserve a lot, and the group failed to properly register these offerings or verify that buyers qualified as accredited investors under SEC Regulation D. Paxton argues that CCP should not qualify for exemptions typically available for private offerings.
However, the Texas State Securities Board publicly contradicted Paxton’s claims. After conducting a months‑long investigation, the agency concluded that the limited partnership interests did not constitute securities under Texas law, even though they were marketed to investors in a manner resembling investment contracts.
The agency did not explain its reasoning, but stated that it had informed Paxton’s office of its findings before the lawsuit was filed. It also advised that any potential claims might be more viable under the Texas Deceptive Trade Practices Act rather than securities law.
Community Capital Partners said in a statement that “The fact that multiple reviews were completed, and that these findings were known before litigation was filed, raises serious and unavoidable questions about why this matter is now being framed as a securities case, and why this project continues to be targeted despite repeated reviews finding no securities violations.”
Sam Edwards, a Texas-based fraud and securities attorney, said he’s not sure how the state board determined the investments didn’t qualify as securities because “the Texas Securities Act specifically lists certain investments that are considered a security, and the first one listed is a limited partner interest.” On the other hand, the agency “is the authority on securities in this state,” he added.
Gov. Greg Abbott has separately directed state agencies to investigate The Meadow and signed a transparency law related to the project. Some inquiries have already been resolved, including a Fair Housing Act complaint and a federal civil rights probe, while others remain ongoing.
— Joel Russell
