Wyly Insider-Trading Trial Opens

Apr 4 2014 | 10:06am ET

Maverick Capital and Ranger Capital founder Sam Wyly ran a massive $550 million insider-trading scheme, the Securities and Exchange Commission told a Manhattan federal jury yesterday.

The trial in the SEC's civil case against Wyly and the estate of his late brother Charles opened in earnest yesterday, with SEC lawyer Bridget Fitzpatrick telling the panel of eight women and four men that it is "time to hold Sam and Charles Wyly accountable." The SEC alleges that the two used an "elaborate sham system" of offshore companies and family offices to trade shares of companies on whose boards they sat, often diverting the profits to Maverick and Ranger.

Neither hedge fund has been accused of any wrongdoing.

The scheme lasted 13 years, Fitzpatrick said. The SEC wants Wyly and his brother's estate to pay $550 million in restitution.

Wyly's lawyer, Stephen Sussman, rejected the allegations.

"These men are law-abiding citizens that were trying to follow what the SEC requires," he said in his opening. "They were not liars, fraudsters or cheaters."

Charles Wyly died in a car accident in 2011, about a year after he was sued by the SEC.


In Depth

Q&A: TCA Fund Management's Bob Press on Small-Cap Private Equity

Aug 25 2016 | 8:55pm ET

The emergence of private credit as a replacement for traditional bank financing...

Lifestyle

Kiawah: Island Reversal

Aug 24 2016 | 9:59pm ET

Looking for real estate investments but the typical real estate fare isn’t cutting...

Guest Contributor

Old Hill Partners: Embrace Illiquidity

Aug 9 2016 | 2:39pm ET

The age-old financial concept that higher yields are the result of higher risk and...