Thursday, 25 August 2016
Last updated 4 hours ago
Jul 30 2014 | 8:15am ET
The Securities and Exchange Commission has suffered another setback in its court battle with Maverick Capital and Ranger Capital founder Sam Wyly, just months after a jury handed it a major victory.
U.S. District Judge Shira Scheindlin has rejected the regulator’s bid to seek the total profits earned by Wyly and his late brother, Charles, on trades that the jury found they improperly hid, or $1.4 billion. But Scheindlin, who presided over the trial, said “it defies logic to presume that all of the rise in the value of a company’s stock price over 13 years… is reasonably tied to two directors’ failure to disclose their trading.”
She ordered the SEC to come up with a lower figure and a “credible explanation” for it in advance of a non-jury trial next week to determine how much the Wylys must pay.
Scheindlin’s ruling comes two weeks after she cleared the Wylys of insider-trading in the case. Sam Wyly has denied any wrongdoing, and argued unsuccessfully that the offshore trusts that the SEC called an “elaborate sham system” were used for legitimate tax purposes.
Scheindlin did allow the SEC to seek about $138 million in profits from the sale of unregistered securities, and about $750 million in unpaid taxes stemming from the use of the trusts.