In his second day on the stand, Ranger Capital and Maverick Capital founder Sam Wyly reiterated that he and his late brother failed to disclose more than $750 million in stock sales because he was advised that he did not have to.
Wyly, who will testify in two-hour increments over the next two weeks due to an undisclosed medical condition, laid the blame at the feet of his former lawyer, Michael French, who is cooperating with prosecutors. Wyly said French assured him that his and his brother’s use of offshore trusts to hide the sales was legal, and if that he had advised otherwise he would have disclosed them.
“I would have told him to make whatever filings he needed to make,” Wyly said.
“Did you have any reason to suspect Mr. French was being anything other than candid and honest?” his lawyer, Stephen Susman, asked.
“No,” Wyly said.
The Securities and Exchange Commission alleges that Wyly and his brother, Charles, who died in 2011, ran an “elaborate sham system” of offshore companies to trade shares of companies on whose boards they sat. The sales occurred over 13 years; some of the proceeds were used to buy ranches in Colorado and Texas, as well as a painting.
“Would you have bought these things, anyway?” Sussman asked.
“Sure,” Wyly said. “Great painting.”