SEC Charges Wyly Brothers With Illegal Stock Trading

The Wyly Brothers -- Sam and Charles -- have been charged by the Securities and Exchange Commission with using secret overseas accounts to generate more than $550 million in illegal stock trades.

The brothers -- each is said to be worth more than $1 billion -- began working in the computer industry in their 20s and through a series of startups and acquisitions amassed their fortunes. They have denied the SEC charges.

Sam Wyly founded University Computing in the early 1960s and in 1970 he purchased Computer Technology, which operated as an in-house data processing unit for conglomerate LTV. The Wylys biggest hit came in 2000 when they sold their Sterling Software to Computer Associates for $4 billion.

The SEC, which filed the charges in Federal District Court in Manhattan, maintain that the Wylys used illegally acquired gains to purchase millions of dollars worth of art, jewelry, ranches in Aspen, Colorado, as well as a horse farm near their hometown of Dallas.

Although relatively quiet in the computer and telecommunications industries in recent years, the Wylys have made a mark by contributing to conservative causes. In 2000, they financed TV attacks against Senator John McCain through Republicans for Clean Air. The Wyly brothers were major contributors to the campaigns of former Presidents George H.W. Bush and George W. Bush. Later, the Wylies contributed to the Swift Boat Veterans for Truth, a conservative organization that attacked Democratic Senator John Kerry's military record.

William Brewer III, an attorney representing the Wylys, denied the SEC charges. "The Wylys have always received the advice and counsel of leading accounting and legal professionals," said Brewer according to media accounts. "They have never been given any reason to believe the financial transactions in question where anything other than legal and fully appropriate."