SEC Charges Billionaire Brothers With Fraud
The Securities and Exchange Commission has charged billionaire brothers Sam and Charles Wyly with violating federal securities laws according to the Wall Street Journal. The SEC press release can be seen here.
The brothers reaped more than $550 million in trading profits from their various stakes in companies. The stocks being called into question are: Michaels, a unit of Michaels Holdings LLC; Sterling Software Inc., which was later sold to Computer Associates (NYSE: CA), Sterling Commerce, Inc., which was later sold to SBC Communications (NYSE: T), and Scottish Re Group Ltd., according to the SEC.
The lawsuit follows a 6 year probe into the Wyly brothers who have gained their fortune over a period of four decades. The lawsuit states that the brothers hid their money by using an "elaborate sham system" of offshore entities.
The lawyer for the Wyly brothers, William A. Brewer III, said, "After six years of investigations, the SEC has chosen to make claims against the Wyly brothers—claims that, in our view, are without merit."
