SEC Accuses Wyly brothers of Insider Trading Yielding $550 MIL

[sonias]

Huffington Post 7/29/10
SEC Accuses Sam And Charles Wyly, Billionaire Dallas Investors, Of Insider Trading Yielding $550 MILLION
DALLAS — Famed Dallas billionaire investors Sam and Charles Wyly made $550 million in undisclosed profits through 13 years of insider trading in the shares of companies on whose boards they served, according to a Securities and Exchange Commission lawsuit filed Thursday.

In a 78-page complaint filed in a Manhattan federal court in New York, the SEC said the Wylys held and traded tens of millions of securities in the companies and "defrauded the investing public" by misrepresenting the Wylys' ownership and trading of those shares.

"The apparatus of the fraud was an elaborate sham system of trusts and subsidiary companies located in the Isle of Man and the Cayman Islands ... created by and at the direction of the Wylys," the SEC complaint stated.

Using this offshore system, the Wylys were able to sell stock worth more than $750 million in four public companies where they served as corporate directors. They also committed an insider trading violation at one of the companies that resulted in an unlawful gain of over $31.7 million, according to the complaint.

Just to remind DUers who the Wylys are

Source Watch

Charles J. Wyly Jr. and Sam Wyly, often referred to as the Wyly Brothers and the "Wyly coyotes", are two prominent Dallas, Texas, billionaire businessmen brothers well-known for bankrolling Republican candidates, as well as for funding the smear group Swift Boat Veterans for Truth.

Hope those assholes go to jail!

:woohoo::woohoo::woohoo:

[sonias]

1. Politically connected Wyly brothers charged in massive fraud

Market Cop - Washington Post 7/29/10
Politically connected Wyly brothers charged in massive fraud

Samuel Wyly and Charles Wyly -- billionaire brothers in Texas who have spent millions funding political campaigns -- committed violations of federal securities laws and fraud by using offshore accounts to secretly trade the shares of public companies whose boards they sat on, reaping more than $550 million in profit, according to a Securities and Exchange Commission complaint filed Thursday.

The politically-active Wylys, who have been generous donors to Republican causes over the years, have faced questions in recent years -- including a Senate probe -- about whether they ran an extensive network of tax shelters.

"The cloak of secrecy has been lifted from the complex web of foreign structures used by the Wylys to evade the securities laws," said SEC deputy director of enforcement Lorin L. Reisner. "They used these structures to conceal hundreds of millions of dollars of gains in violation of the disclosure requirements for corporate insiders."

(snip)
The SEC's charges, which are civil in nature, seek various financial fines and sanctions against the Wylys and their associates.

The charges are civil in nature? Why isn't this criminal like Bernie Madoff charges? They sent Martha Stewart to jail for insider trading but they won't go after the Wyle coyote brothers? :wtf:

:mad:

[TEXASYANKEE]

2. Thanks Sonia.

The local Dallas media (WFAA) is covering this ... well, not so much "covering" it as glossing over most of the details.

[sonias]

3. Exactly

How come no one is asking for their hides on these scams? Why is this any different than what Madoff or Martha Stewart did. She did some insider trading and they sent her to jail. Madoff may have bilked more money from more people but no doubt he's in jail.

So why to the Wyle coyete brothers get to skate on criminal charges?

They're going to pay a fine and big whooping deal. It will be pocket change to them and it won't stop them from doing it again.

:grr:

[sonias]

4. Attorney General Abbott's Tainted Wyly Money

Barbara Ann Radnofsky for Texas Attorney General - Press Release 7/30/10
Attorney General Abbott's Tainted Wyly Money

Houston, Texas. July 30, 2010. The Securities and Exchange Commission announced yesterday that they were filing charges against Texas billionaires Samuel and Charles Wyly for massive securities fraud. The brothers along with their law firm Bickel & Brewer have donated a total of $132,750 to Mr. Abbott. The Wyly brothers donated $85,000 ($42,500 from each brother) and $47,750 was donated from the law firm of Bickel & Brewer.

Mr. Abbott has collected over $2.05 million in contributions from Wall Street interests. Barbara Ann Radnofsky, 2010 Democratic nominee for Texas Attorney General, responded to the revelation that Mr. Abbott has collected significant donations from the Wyly brothers and their lawyers.

Radnofsky: "I call on Mr. Abbott to return all of his tainted campaign money from Wall Street interests. The government is talking of fining the scoundrels of Wall Street who took down our economy but Texas won't see a penny. Mr. Abbott collects campaign donations from Wall Street interests. I will fight Wall Street for the money Texans lost, and he won't."

On June 21, 2010, Radnofsky provided Texas Attorney General Greg Abbott an $18 billion lawsuit for Texas recoveries against Wall Street, now available at www.suewallstreet.com. Attorney General Abbott did not act.

In her letter to the Attorney General, Radnofsky offered to handle the case for no fee, with other, identified volunteer counsel. Radnofsky pledges that, as Attorney General, she would only use great lawyers willing to handle this case at no fee and the fine career lawyers within the Attorney General's office.

:dem:

[onestepforward]

5. Abbott needs to go

along with Perry. I hope this story gets a lot of coverage.

[white cloud]

6. Here is the NPR story

uly 30, 2010
Sam and Charles Wyly, Dallas billionaire investors known for their support of conservative candidates and causes, made $550 million in undisclosed profits through 13 years of insider trading, according to a Securities and Exchange Commission lawsuit filed Thursday.

In a 78-page complaint filed in a Manhattan federal court in New York, the SEC said the Wylys held and traded tens of millions of shares in companies on whose boards they served and "defrauded the investing public" by misrepresenting their ownership and trading of those stocks.

"The apparatus of the fraud was an elaborate sham system of trusts and subsidiary companies located in the Isle of Man and the Cayman Islands ... created by and at the direction of the Wylys," the SEC complaint stated.
>>>>>>>

In March, Forbes magazine estimated Sam Wyly's net worth at $1 billion. He has given generously to Republican causes and candidates, including the Swift Boat campaign that helped re-elect President George W. Bush in 2004 by tarring his Democratic opponent, Sen. John Kerry.>>>>>

http://www.npr.org/templates/story/story.php?storyId=128869136&sc=nl&cc=nh-20100730

[white cloud]

7. NRCC must give back tainted Wyly funds

Follow us: On the Web | Facebook | or Text LONESTAR to 388873

NRCC must give back tainted Wyly funds
Canseco should demand that Pete Sessions come
clean on corrupt Wyly connection

Public documents reveal that the National Republican Congressional Committee (NRCC), headed by Pete Sessions, has taken at least $124,000 from recently charged insider traders Sam and Charles Wyly. The Wyly brothers, “hid $550 million in trading profits by using an ‘elaborate sham system’ of offshore entities,” according to the Securities and Exchange Commission. (Source: Wall Street Journal, July 30, 2010)

Meanwhile, the NRCC has instructed Republican candidates to attack their opponents regarding Charlie Rangel’s ethics controversy.

The NRCC must return the tainted donations received from the corrupt Wyly brothers or be exposed as hypocrites. Congressional candidates like Quico Canseco who have cynically used Rangel to attack their opponents, should immediately demand that Pete Sessions disclose all connections to the Wyly brothers and return the contributions to the NRCC. If Sessions refuses, then Canseco should reject any support from the NRCC.

NRCC Takes Big Donations from Charged Wyly Brothers


Donations from
Sam and Charles Wyly
Donations to the NRCC $124,000
Donations to Pete Sessions $29,000

Source: Center for Responsive Politics


The Wyly brothers have been large supporters of the NRCC, Pete Sessions, and Republican Causes throughout Texas. Sam and Charles Wyly have given $124,000 to the NRCC and at least $29,000 to Sessions. Pete Sessions is the second largest recipient of the Wyly’s donations after Republican Kay Bailey Hutchison.

NRCC and Canseco are Cynical Hypocrites
The NRCC recently issued 40 letters to Democrats insisting they return Rangel’s donations. (Source: NY Times, July 27, 2010) Congressional candidate Quico Canseco echoed the NRCC call to use Rangel as an issue in his campaign. On Monday, the same day as the NRCC release, Canseco issued his own Rangel attacks. In fact, Canseco sent out an email today using Rangel as a hook to raise funds. Now Canseco must call on the NRCC to return the money and the NRCC should comply or both will look like hypocrites.

Pete Sessions has hosted a fundraiser for Canseco and donated $5,000 to his campaign. The NRCC is likely to spend resources in the district. (Source: FEC)

Comments from Lone Star Project Director Matt Angle:
Instead of taking advice and direction from Pete Sessions and the National Republican Party, Canseco should demand that the NRCC give back the thousands of dollars in dirty money received from the Wyly brothers.

Canseco comes from the same special interest culture as the Wyly brothers. It's not surprising that he thinks it's OK for inside traders and corrupt businessmen to fund their party.

July 30, 2010
Contact: Matt Angle
[phone] - Fax [phone]

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The Lone Star Project is an activity of the Lone Star Fund.
Contributions or gifts to the Lone Star Fund are not tax deductible. All contributions are subject to the prohibitions and limitations of the Federal Election Campaign Act. Federal Law requires us to use best efforts to collect and report the name, mailing address, occupation and name of employer of individuals whose contributions exceed $200 in a calendar year.

Paid for by The Lone Star Fund, 6 E St, SE, Washington, DC 20003.
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Lone Star Fund
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Washington, DC 20003

[sonias]

8. Yeah I love this group - Lone Star Project

Telling it like it is - with facts!

:applause:

[sonias]

9. Wyle brothers gave $750,000 to Perry & Dewhurst since 2000

The American Independent 7/30/10
Wyly brothers have donated more than $750,000 to Gov. Perry, Lt. Gov. Dewhurst since 2000

Since 2000, the top two elected officials in Texas have received more than a quarter-million dollars in campaign contributions from Charles and Sam Wyly, Dallas billionaire brothers accused of massive investment fraud by federal authorities.

(snip)
The Wylys have been similarly prolific contributors in Texas, giving $1.4 million to state-level candidates and committees since 2000, according to Texas Ethics Commission records. However, the brothers have slowed the flow of money in recent years and have not given to a candidate since 2006, contributing only to Texas Business for Clean Air PAC and Southwestern Research and Medical PAC in the past three years.

More than half of the Wylys’ state contributions have gone to the governor and lieutenant governor of Texas.

To make things clear, the positive sounding name of "Texas Business for Clean Air PAC" is just a sham for just the opposite of what it sounds like. Typical Karl Rove type of branding. Texas Clean Air PAC is just a front for the nuclear power industry.

Sam Wyle also was part founder of "Republicans for Clean Air". Yeah right - who is going to believe that statement! That one was set up to help G.W. beat McCain in the 2000 Presidential primary.

:puke:

[white cloud]

10. Top Recipients of Wyly Brothers' Campaign Cash Aren't Talking

Charles Wyly Jr. and Samuel Wyly of Dallas, charged by the Securities and Exchange Commission with massive securities fraud, have bankrolled a host of Republican candidates, as well as national and state party committees.

But a day after the charges broke, hardly any of the Wylys' top political beneficiaries were talking: Only the office of Sen. Kay Baily Hutchison (R-Texas) even returned phone requests by OpenSecrets Blog for comment among the eight active politicians and three national party committees receiving more than $10,000.

Those on the no-talk list include representatives from the Republican National Committee, National Republican Congressional Committee and National Republican Senatorial Committee. Together, these committees have received more than $1.7 million in contributions from the Wylys and their wives since the 1990 election cycle.

Also not talking: Rep. Pete Sessions, Rep. Lamar Smith, Rep. Jeb Hensarling, Rep. Joe Barton, Rep. Kay Granger and Rep. Sam Johnson -- all congressmen representing Texas districts. Each received between $10,000 and $30,000 from the Wylys and their wives during the past two decades.
>>>>>>>

http://www.opensecrets.org/news/2010/07/republicans-from-texas-wylys-home-s.html

[sonias]

11. All of them are up to their necks in tainted money

So of course they're not talking. :eyes: