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Dallas billionaires face U.S. fraud charge
WASHINGTON, Samuel and Charles Wyly, who made billions in the sale of a business software firm, have been charged with securities fraud, U.S. authorities said Thursday.
The Securities and Exchange Commission, following a six-year investigation, charged the Wyly brothers, based in Dallas, with carrying out a scheme that netted them $550 million, The New York Times reported. An attorney and stockbrokers for the Wylys' were also charged, The Washington Post reported.
The founders of Sterling Software sold the company for $4 billion in stock in March 2000. The SEC charges announced Thursday include insider trading that investigators said allowed the Wylys to realize more than $31 million in gains, the Times said.
Most of the alleged illegal activity involved stocks of Michaels Stores, Sterling Software, Sterling Commerce and Scottish Annuity and Life Holdings -- companies for which the Wylys held executive positions or seats on the board of directors.
The SEC said the Wylys used the proceeds of the alleged fraud to acquire art and jewelry, as well as $100 million in real estate. They are also accused of directing the money to charitable contributions.
The Wylys have been politically active, donating to Republican causes, the Post reported.
Lorin L. Reisner, deputy director of enforcement at the SEC, said the brothers traded more than $750 million in stock, using a system of accounts and companies in the Isle of Man and the Cayman Islands that they set up.
"The cloak of secrecy has been lifted from the complex web of foreign structures used by the Wylys to evade the securities laws," Reisner said.
William Brewer, an attorney for the Wylys, said the SEC charges "are without merit" and the Wylys' "expect to be fully vindicated.
WASHINGTON, Samuel and Charles Wyly, who made billions in the sale of a business software firm, have been charged with securities fraud, U.S. authorities said Thursday.
The Securities and Exchange Commission, following a six-year investigation, charged the Wyly brothers, based in Dallas, with carrying out a scheme that netted them $550 million, The New York Times reported. An attorney and stockbrokers for the Wylys' were also charged, The Washington Post reported.
The founders of Sterling Software sold the company for $4 billion in stock in March 2000. The SEC charges announced Thursday include insider trading that investigators said allowed the Wylys to realize more than $31 million in gains, the Times said.
Most of the alleged illegal activity involved stocks of Michaels Stores, Sterling Software, Sterling Commerce and Scottish Annuity and Life Holdings -- companies for which the Wylys held executive positions or seats on the board of directors.
The SEC said the Wylys used the proceeds of the alleged fraud to acquire art and jewelry, as well as $100 million in real estate. They are also accused of directing the money to charitable contributions.
The Wylys have been politically active, donating to Republican causes, the Post reported.
Lorin L. Reisner, deputy director of enforcement at the SEC, said the brothers traded more than $750 million in stock, using a system of accounts and companies in the Isle of Man and the Cayman Islands that they set up.
"The cloak of secrecy has been lifted from the complex web of foreign structures used by the Wylys to evade the securities laws," Reisner said.
William Brewer, an attorney for the Wylys, said the SEC charges "are without merit" and the Wylys' "expect to be fully vindicated.