Attorneys for Samuel Wyly and the estate of Charles Wyly, who were found liable for using a network of offshore trusts to conceal stock holdings in illegal trading, claim that they cannot pay the $728 million demanded by the SEC, stating that it would bankrupt them. Last week featured closing arguments from both sides in a non-jury trial regarding the amount the brothers should pay following their May 2014 jury verdict. Their attorneys claim that they have a combined net worth of about $119 million.

The Wylys asserted that the SEC did not show a nexus between the amount they demanded and the transactions for which the jury found them liable, arguing that $1.38 million should be the maximum amount they should pay. They claim that the SEC failed to present any evidence that any of their investors were harmed by the securities law violations. The jury found, however, that the Michaels Stores Inc. co-founders operated a fraud that earned them over $550 million in illicit gains over thirteen years.

The SEC reduced its demand from $1.41 billion after the judge rejected one of the theories underlying its calculations. The judge also threw out the SEC’s insider-trading claim against the brothers. The SEC, however, believes the numbers are “fair and equitable,” according to Bridget Fitzpatrick, an attorney for the SEC.

If you or someone you know has lost money as a result of an investment or Ponzi scheme, please contact Richard Frankowski at 888-741-7503 to discuss your potential legal remedies.