SEC law­suit: Wyly broth­ers scored $500 mil­lion with se­cu­ri­ties dodges

Austin American-Statesman - - BUSINESSBRIEFING - Com­piled from wire re­ports

The Se­cu­ri­ties and Ex­change Com­mis­sion sued Dal­las’ Wyly broth­ers, ac­cus­ing them of a 13-year fraud that earned them prof­its of more than $500 mil­lion.

The suit filed in New York cul­mi­nates more than five years of in­ves­ti­ga­tion into Sam and Charles Wyly, two of North Texas’ biggest busi­ness­men and char­i­ta­ble bene­fac­tors.

The suit al­leges the Wylys used off­shore ac­counts to shuf­fle money back and forth to evade se­cu­ri­ties laws. They also failed to dis­close own­er­ship of shares and used in­sider in­for­ma­tion to make trades that made them mil­lions of dol­lars, the suit claims.

“The cloak of se­crecy has been lifted from the com­plex web of for­eign struc­tures used by the Wylys to evade the se­cu­ri­ties laws,” said Lorin Reis­ner, deputy di­rec­tor of the SEC’s Di­vi­sion of En­force­ment, in a state­ment. “They used these struc­tures to con­ceal hun­dreds of mil­lions of dol­lars of gains in vi­o­la­tion of the dis­clo­sure re­quire­ments for cor­po­rate in­sid­ers.”

Wil­liam Brewer III, the lead coun­sel for the Wylys, said the claims are with­out merit and are a “mis­ap­pli­ca­tion of the law.”

While run­ning Michaels, a chain of arts and crafts stores, the Wylys dis­closed in the past five years that fed­eral grand ju­ries had sent the com­pany sub­poe­nas re­lated to an in­ves­ti­ga­tion of the Wylys’ off­shore ac­count­ing. The civil suit seeks mul­ti­mil­lion-dol­lar fi­nan­cial penal­ties and asks the Wylys to re­turn their prof­its.

Newspapers in English

Newspapers from USA

© PressReader. All rights reserved.