Texas Wyly brothers must pay $299 million in SEC fraud case: judge
By Nate Raymond
NEW YORK, Feb 26 (Reuters) - A federal judge on Thursday ordered Texas tycoon Sam Wyly and his late brother's estate to pay the U.S. Securities and Exchange Commission $299.4 million for engaging in securities fraud.
The order by U.S. District Judge Shira Scheindlin in Manhattan followed months of wrangling over the exact amount Wyly and the estate of Charles Wyly should pay after a jury found them civilly liable in May.
The judge ordered Sam Wyly, 80, to pay $198.1 million in disgorged gains and interest, while his Charles Wylys' estate was directed to pay $101.2 million.
"We are pleased with the judgment and will take every available step to enforce it," said Andrew Ceresney, director of enforcement at the SEC.
A lawyer for the Wylys declined comment.
The final judgment sets the case up for an appeal amid the ongoing bankruptcy of Sam Wyly, a once-reported billionaire who filed for Chapter 11 protection in October amid the SEC's pursuit for damages.
The SEC, which sued the Wylys in 2010, contended the brothers earned $553 million in undisclosed profits by trading in four companies using trusts in the Isle of Man.
The companies included Sterling Software Inc, Michaels Stores Inc, Sterling Commerce Inc and Scottish Annuity & Life Holdings Ltd, now Scottish Re Group Ltd.
Charles Wyly died in 2011, a year after the SEC sued, and his estate was substituted as a defendant. His widow, Caroline, has filed for bankruptcy as well, citing the SEC claim.
Scheindlin in a related ruling Thursday concluded that the Wylys were entitled to an offset for amounts due to the Internal Revenue Service based on amounts paid to the SEC.
The case is U.S. Securities and Exchange Commission v. Wyly et al, U.S. District Court, Southern District of New York, 10-5760.
(Reporting by Nate Raymond in New York; Editing by Cynthia Osterman)
