NEW YORK (Reuters) - The Securities and Exchange Commission charged the brothers Samuel Wyly and Charles Wyly with fraud for reaping more than $550 million of illicit gains by trading stock in four companies on whose boards they sat as directors.
The SEC alleged that the Wylys created a sham web of trusts and subsidiaries in the Isle of Man and the Cayman Islands to conceal their sales of more than $750 million of stock in the companies. It said they also committed one insider trading violation, resulting in an unlawful $31.7 million gain.
Also charged over the scheme were the Wylys' lawyer Michael French and a stockbroker, Louis Schaufele, the SEC said.
Lawyers for all of the defendants did not immediately return calls seeking comment.
The case is SEC v. Wyly et al, U.S. District Court, Southern District of New York, No. 10-05760.
(Reporting by Jonathan Stempel in New York; Editing by Tim Dobbyn)
