Thursday, 30 June 2016
Last updated 11 hours ago
Apr 23 2014 | 10:11am ET
Maverick Capital and Ranger Capital founder Sam Wyly yesterday began what could be two weeks on the witness stand denying allegations that he and his late brother ran a $550 million insider-trading scheme.
The 79-year-old has an undisclosed medical condition that limits his daily testimony to just two hours. The unusual issue means that jurors will hear from other witnesses each day after Wyly’s testimony.
According to the Securities and Exchange Commission, Wyly and his brother, Charles, who died in 2011, had an “elaborate sham system” of offshore companies to trade shares of companies on whose boards they sat. The undisclosed profits were frequently diverted to Maverick or Ranger, the SEC, said.
Neither hedge fund has been accused of any wrongdoing.
Wyly, who frequently cupped his hand to his ear to improve his hearing, told jurors yesterday that he did not “create this trusts in the Isle of Man to commit securities fraud.” His lawyer, who asked that question, said that the Wyly brothers relied on an “army” of other attorneys to advise them on the transactions.
One of those lawyers, Michael French, testified for the SEC after Wyly’s two hours were up. He said the brothers designed the trusts to hide their stock trading from the public.
Wyly said that he depended on French and others to keep him on the straight and narrow, although he acknowledged that the trusts were designed to minimize SEC filing requirements.