Tuesday, 30 August 2016
Last updated 11 min ago
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.