| NEW YORK
NEW YORK Oct 1 Texas businessman Sam Wyly has
agreed to pay $198.1 million to resolve claims by U.S.
securities regulators that he engaged in a long-running
securities fraud to hide trades in companies he controlled using
offshore trusts, according to a court filing.
According to papers filed by the U.S. Securities and
Exchange Commission on Friday in Manhattan federal court, Wyly
is also in talks to resolve tax claims by the Internal Revenue
Service after he was ordered to pay $1.11 billion.
The settlement is subject to approval by SEC commissioners
and a federal bankruptcy judge in Dallas, where the
once-reported billionaire filed for Chapter 11 in 2014 amid the
SEC's pursuit for monetary sanctions.
Under the settlement agreement, Wyly, 81, and his family
have agreed to take steps to have the offshore trusts at issue
in the Isle of Man make payments to satisfy a judgment the SEC
obtained in 2015.
The SEC will meanwhile cooperate with ensuring Wyly receives
a credit against his federal income tax liabilities of nearly
Neither the SEC nor a spokesman for Wyly responded
immediately to a request for comment on Saturday.
The SEC sued Sam Wyly and his brother Charles Wyly in 2010,
alleging they earned $553 million in undisclosed profits by
trading in four companies they controlled using trusts in the
Isle of Man.
Both denied wrongdoing. Charles Wyly died in 2011, and his
estate was substituted as a defendant.
After a jury in May 2014 found them liable for securities
fraud, a federal judge ordered Sam Wyly to pay $198.1 million
and Charles Wyly's estate to pay $101.2 million.
Sam Wyly, who last appeared on Forbes magazine's list of the
400 richest Americans in 2010 with a net worth of $1 billion,
and Caroline "Dee" Wyly, Charles Wyly's widow, subsequently
filed for bankruptcy.
The IRS in bankruptcy court took both to trial, alleging Sam
and Charles Wyly committed tax fraud by shielding much of their
wealth in offshore trusts.
U.S. Bankruptcy Judge Barbara Houser in Dallas earlier this
year found Sam Wyly liable and ordered him to pay $1.11 billion
in back taxes, interest and penalties.
The case is U.S. Securities and Exchange Commission v. Wyly
et al, U.S. District Court, Southern District of New York, No.
(Editing by Alexander Smith)