| NEW YORK
NEW YORK May 8 Jury deliberations got under way
on Thursday in the trial of Texas tycoon Samuel Wyly and his
late brother, Charles Wyly, who the U.S. Securities and Exchange
Commission accuse of engaging in a $550 million fraud.
The federal jury in Manhattan is weighing whether to hold
Sam Wyly and his brother's estate liable for fraud in connection
with civil claims by the SEC that they engaged in a "scheme of
secrecy" involving undisclosed stock trading in offshore trusts.
The eight women and four men on the jury include a former
model, a speech pathologist and a nurse. Jurors briefly convened
Wednesday to pick a former owner of an auto parts business as
The SEC sued the Wylys in 2010, accusing the brothers of
using a maze of trusts in the Isle of Man to conceal trading
from 1992 to 2004 in four companies on whose boards they
Those companies included Sterling Software Inc, Michaels
Stores Inc, Sterling Commerce Inc, and Scottish Annuity & Life
Holdings Ltd, now called Scottish Re Group Ltd.
The SEC said the scheme resulted in $550 million in profits.
The Wylys denied wrongdoing, contending they were not
legally the beneficial owners of securities held in the trusts
and had no duty to disclose them.
The SEC also contends the Wylys earned $31.7 million from
insider trading in Sterling Software after deciding to sell the
company in 1999.
Those claims would be heard separately by U.S. District
Judge Shira Scheindlin, who would also decide what if any
monetary penalty to impose.
Stephen Susman, the Wylys' lawyer, told jurors Tuesday the
SEC was intent on "ruining the reputations of Sam and Charles
Wyly and jeopardizing the financial security that they, in the
twilight of their years, tried to create for their family."
Sam Wyly, 79, last appeared on Forbes' list of the 400
richest Americans in 2010 with a net worth of $1 billion.
Charles Wyly died in a car crash in 2011.
The case is SEC v. Wyly et al, U.S. District Court, Southern
District of New York, No. 10-05760.
(Reporting by Nate Raymond in New York; Editing by Tom Brown)