The Securities and Exchange Commission is going after two very big fish. On Thursday, the agency accused
Samuel Wyly and Charles Wyly of "using secret overseas accounts to reap
more than $550 million in profit through illegal stock trades."
According to the government, the brothers set up an elaborate network of
accounts in the Cayman Islands and the Isle of Man that were used to
trade stock in public companies the brothers served on as board members.
The Wyly brothers are Texas billionaires who have lavished their vast wealth on a slew of Republican politicians. Here's what we know about
them and the SEC complaint:
This Is Potentially Huge, writes Edward Wyatt in the New York Times: "If the S.E.C. is successful in proving all of its allegations, it
could result in one of the biggest judgments ever in a securities fraud
case. The commission is seeking disgorgement of the $550 million in
gains and prejudgment interest and financial penalties."
These Guys Owned the GOP, writes Marcus Baram
at The Huffington Post: "Charles and Samuel Wyly, along with their
wives, have donated $2.5 million to more than 200 Republican candidates
and committees over the past 20 years, including over $1.3 million to
the Republican National Committee, according to an analysis
by the Center for Responsive Politics. The top recipients of their
largesse have been Texas Republicans. George W. Bush received at least
$100,000 raised by the Wyly clan during the 2000 presidential election.
Sen. Kay Bailey Hutchinson has received $30,400 from the family; Rep.
Pete Sessions, $29,000. Other Republican senators who've received their
donations include John Cornyn of Texas, Sam Brownback of Kansas, Judd
Gregg of New Hampshire, John Thune of South Dakota and Kit Bond of
Missouri. Sam Wyly also funded the Swift Boat campaign that torpedoed
Massachusetts Democrat John Kerry's 2004 presidential campaign."
They'll Likely Be Shunned, writes Numerian
at The Agonist: "In the corporate world, what makes these allegations
jaw-dropping is the betrayal they represent of a director's fundamental
ethical responsibility to serve the interests of the company and the
shareholders who own it. The Wyly's were secretly selling stock in the
companies they were publicly supporting as directors, an activity that
will likely make them pariahs in the clubby world of executives and
wealthy investors who are selected to serve on the boards of major
Sam Wyly Backed the Swiftboat Ads, recalls Joe Weisenthal at Business Insider:
More Forbes Billionaires Behaving Badly, sighs Luisa Kroll
at Forbes: "Unfortunately it is not the first - nor will it be the last
- time a member of our Forbes 400 list of richest Americans runs into
trouble with the law. Sometimes it works out okay. All charges against
Broadcom's Henry Nicholas, who could have faced up to a potential 360
years in prison for 21 counts of options backdating and 4 counts of drug
conspiracy, were dropped in January on the basis of prosecutorial
misconduct. Some billionaires like A. Alfred Taubman and Michael Milken
spent time behind bars and are now back to their lives and back on our
rich list. Then there is fellow Texan Allan Stanford who sits in a Texas
cell awaiting his 2011 trial on 21 criminal charges of defrauding
The SEC Is Alive Again! writes Ashby Jones
at The Wall Street Journal: "If Mary Schapiro’s Securities &
Exchange Commission has adopted a strategy for helping people forget
about the missed opportunity that was Bernie Madoff, it might be this:
create more opportunities. Preferably high-profile, Goldman Sachs-type
opportunities." David Dayen
at FireDogLake agrees: "There does seem to be a resurrection of
activity from the SEC under the new leadership of Mary Schapiro. It’s
certainly more aggressive than the Chris Cox years."
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