SEC says Wyly is burning through cash before assets can be frozen

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Kevin P. Coughlin

Dallas businessman Samuel Wyly.

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Lance Murray

Digital Content Producer- Dallas Business Journal

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Attorneys for the Securities and Exchange Commission have told a judge that Dallas businessman Samuel Wyly is trying to burn through cash before his assets can be frozen by an agency lawsuit, Bloomberg reported.

The SEC said that Wyly, 80, is spending extravagantly.

Wyly is facing a possible $400 million forfeiture after he, and the estate of his late brother, Charles, were found liable by a jury for using offshore trusts to hide stock and make illegal trades.

In court documents, the SEC said that Wyly is using Chapter 11 protection as an "end run" around the agency, Bloomberg reporte.

The SEC said that Wyly is spending at a "burn rate" of roughly $3.75 million a month and has shed $450 million in assets in the past decade.

That makes freezing his assets "essential," the SEC said.

The agency also was alarmed at the personal spending budget Wyly submitted for court approval.

"His monthly household expenses alone would boggle the average homeowner," the SEC said in its filing to the U.S. Bankruptcy Court in Dallas. "The budget is simply too fat to approve."

According to Bloomberg, the SEC said Wyly's monthly expenses include $2,200 for his pool, home maintenance and landscaping, $2,000 for groceries, $7,000 to support family and friends, and more than $100,000 to run his family office.

Wyly filed the personal expenses with the court for its approval and to set aside cash as collateral, Bloomberg said. Wyly needs a judge's approval to pay his expenses while he's in the Chapter 11 process.

Lance Murray edits and writes for the DBJ's website and can be reached at 214-706-7106. Subscribe to our email newsletters.