Busted! SEC Charges Wyly Brothers with Fraud

Texas Billionaire Charles Wyly

Texas Billionaire Sam Wyly

"In 2004, the Wylys helped fund Swift Boat Veterans for Truth, [a] third-party organization that ran controversial television ads attacking the military record of Sen. John F. Kerry (Mass.), Bush's Democratic opponent."---Washington Post (7-30-10/page 2)

According to the New York Times (4-9-09):

[The global warming denialist Marc Morano] was the first to publish accusations from Vietnam Swift-boat veterans that Senator John Kerry of Massachusetts, then the Democratic presidential nominee, had glorified his war record. Many of the accusations later proved unfounded.

The Washington Post (7-30-10) reports:

Sam and Charles Wyly, billionaire Texas brothers who gained prominence spending millions of dollars on conservative political causes, committed fraud by using secret overseas accounts to generate more than $550 million in profit through illegal stock trades, the Securities and Exchange Commission charged Thursday.

The Wylys, who have been generous contributors to the Republican Party and GOP candidates, have spent the past several years facing questions, including from a Senate investigative committee, about whether they hid millions of dollars in tax shelters abroad.

Through their lawyer, the Wylys denied all charges.

According to the SEC, the brothers, who live in Dallas, created an elaborate and clandestine network of accounts and companies on the Isle of Man and in the Cayman Islands. The brothers then used these accounts and companies to trade more than $750 million of stock in four public companies on whose boards they served, not filing the disclosures required for corporate insiders, the SEC said.

In one case, the SEC alleges that the Wylys traded based on insider information they learned as board members, netting a profit of $32 million. [See the full text.]