Texas businessman Samuel Wyly and the estate of his deceased brother, Charles, were liable for fraud for having engaged in a “scheme of secrecy” involving offshore trusts that netted them $550 million in trading profits, a jury decided on Monday.
Jurors in Manhattan federal court found the defendants liable on all claims brought by the U.S. Securities and Exchange Commission, in that regulator’s largest case to go to trial in recent years.
The case was seen as a critical test of the SEC’s trial capabilities following a string of recent losses, including a not guilty verdict for billionaire Mark Cuban last October in an insider trading case.
It also followed years of litigation and investigation by the SEC and other authorities of the Wylys, who acknowledged creating a maze of trusts in the Isle of Man in an effort to obtain tax benefits.
According to the SEC, these trusts were designed to conceal trading from 1992 to 2004 in four companies on whose boards the Wylys sat.
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