The Canadian Press - ONLINE EDITION

NY jury finds Texas entrepreneurs liable in civil fraud case brought by financial regulators

  • Print

NEW YORK, N.Y. - Two Texas brothers acted fraudulently by trying to hide assets they controlled in four public companies that were sold for billions of dollars, a jury determined Monday in a civil trial.

The Manhattan jury returned its verdict against 79-year-old Sam Wyly and the estate of his brother, Charles, whom the Securities and Exchange Commission had accused of earning more than $500 million illegally by using offshore accounts to trade securities.

Damages will be assessed by U.S. District Judge Shira Scheindlin after additional submissions by lawyers.

Wyly, who testified on his own behalf during the trial, was not in the courtroom for the verdict. Two other family members cried as the verdict was announced by the jury forewoman.

The Wylys earned more than $14 billion by selling companies including the arts and crafts retail chain Michael Stores Inc. and two technology companies. After the sales, Sam Wyly was on the Forbes list of billionaires for a time while the brothers donated millions of dollars to mostly conservative Republican candidates and causes. Charles Wyly died in a car accident in Aspen, Colorado, three years ago.

In a statement after the verdict, defence attorney Stephen Susman said he was "deeply disappointed."

"Despite this setback, we maintain that Sam and Charles Wyly acted in good faith. We will continue to fight for justice through the next phases of the legal process," he added.

SEC Enforcement Director Andrew Ceresney said the agency was gratified.

"We proved that the Wylys used a system of offshore trusts to conceal their transactions as directors of publicly traded companies," he said. "We will continue to hold accountable, and bring to trial when necessary, those who commit fraud no matter how complex their scheme or how hard they try to hide it."

In closing arguments, SEC attorney Bridget Fitzpatrick had urged jurors to find that the brothers acted fraudulently by taking steps to hide their offshore dealings in the companies they controlled. She said they also failed to file proper documentation.

She accused Wyly of lying multiple times when he claimed he was happy to disclose information publicly and never hid assets in the Isle of Man, where offshore trusts were used to trade in the securities of the companies.

Susman had told jurors that Wyly trusted employees to make required document filings and relied on experts in the law and taxes to guide his decisions.

Fact Check

Fact Check

Have you found an error, or know of something we’ve missed in one of our stories?
Please use the form below and let us know.

* Required
  • Please post the headline of the story or the title of the video with the error.

  • Please post exactly what was wrong with the story.

  • Please indicate your source for the correct information.

  • Yes

    No

  • This will only be used to contact you if we have a question about your submission, it will not be used to identify you or be published.

  • Cancel

Having problems with the form?

Contact Us Directly
  • Print

You can comment on most stories on winnipegfreepress.com. You can also agree or disagree with other comments. All you need to do is be a Winnipeg Free Press print or e-edition subscriber to join the conversation and give your feedback.

You can comment on most stories on winnipegfreepress.com. You can also agree or disagree with other comments. All you need to do is be a Winnipeg Free Press print or e-edition subscriber to join the conversation and give your feedback.

Have Your Say

New to commenting? Check out our Frequently Asked Questions.

Have Your Say

Comments are open to Winnipeg Free Press print or e-edition subscribers only. why?

Have Your Say

Comments are open to Winnipeg Free Press Subscribers only. why?

The Winnipeg Free Press does not necessarily endorse any of the views posted. By submitting your comment, you agree to our Terms and Conditions. These terms were revised effective April 16, 2010.

letters

Make text: Larger | Smaller

LATEST VIDEO

Glenn January won't blame offensive line for first loss

View more like this

Photo Store Gallery

  • A monarch butterfly looks for nectar in Mexican sunflowers at Winnipeg's Assiniboine Park Monday afternoon-Monarch butterflys start their annual migration usually in late August with the first sign of frost- Standup photo– August 22, 2011   (JOE BRYKSA / WINNIPEG FREE PRESS)
  • An American White Pelican takes flight from the banks of the Red River in Lockport, MB. A group of pelicans is referred to as a ‘pod’ and the American White Pelican is the only pelican species to have a horn on its bill. May 16, 2012. SARAH O. SWENSON / WINNIPEG FREE PRESS

View More Gallery Photos

Poll

What's your take on a report that shows violent crime is decreasing in Winnipeg?

View Results

View Related Story

Ads by Google