(AXcess News) Dallas - The Securities and Exchange Commission has charged Sam and Charles Wyly with stock fraud in an international scheme involving $550 million in profit that spanned more than a decade of illegal trading in the market.

As a lesson in greed, when you have to ask yourself how much is enough, the two Texas billionaire brothers have politicians running for cover over the charges levied against the pair out of fear the dirty money they earned may have lined the pockets of Texas lawmakers. The Wyly's where both heavy donors to Texas Republicans, which only added to the massive amount of media attention they've received over the case.

The brothers were charged in a lawsuit with insider trading that netted over $550 million over the course of thirteen years, the SEC said in their 178-page complaint.

The Center for Responsive Politics revealed that Sam, Charles and their wives donated $2.5 million to 200 Republicans over the course of 20 years, which included $1.3 million to the Republican National Committee.

One of the biggest GOP recipients of the Wyly brothers generosity was Texas Governor Rick Perry who received $335,000 over the course of several years. Gov. Perry of course was nowhere to be found when he learned of the international scheme the two brothers had cooked up - and who wouldn't be? Even George Bush was in the donation lineup, lucky for "W" he's out of the political limelight - at least until his book comes out.

The SEC lawsuit was filed Thursday in a Manhattan federal court.

Lorin L. Reisner, Deputy Director SEC Enforcement said in a press release issued by the SEC, "The cloak of secrecy has been lifted from the complex web of foreign structures used by the Wylys to evade the securities laws."

In a rarely seen move, the SEC issued a front-page link to the press release saying, "The Wyly brothers reaped more than $550 million in undisclosed gains while sitting on corporate boards by trading stock in those public companies through hidden entities located in foreign jurisdictions to conceal their ownership and trading of those securities."

While laying off stock through European brokerages is no new stunt, the Wyly brothers boldness and clever setup was certainly admirable if you look to expect a billionaire-class investor bent on beating the system using a house of trusts and sham corporations. But the Wyly brothers were so bold they even sat on the boards of the companies with straight faces - all the time the pair where scheming to trade on the information, believing they were above reproach somehow, most likely due to their billionaire status in the business community.

But going down in the soup of deceit was the Wyly's Texas attorney, Michael French and their stockbroker Louis Schaufele III, both of Dallas. According to the SEC complaint, French also sat on the board of three of the four companies the Wyly brothers profited in.

"The apparatus of the fraud was an elaborate sham system of trusts and subsidiary companies located in the Isle of Man and the Cayman Islands," the SEC complaint stated.

The four companies named in the SEC complaint where: Michaels Stores Inc., which was taken private in 2006 by the Blackstone Group, long after the Wyly brothers had profited from the Texas-based company's shares they'd traded in. Sterling Software Inc., which was founded in Texas Sterling Williams and brothers Sam and Charles Wyly, was acquired by Computer Associates International in 2000 in a stock-for-stock transaction worth $3.3 billion. Thereafter, Sterling went on an aggressive acquisition spree spanning eight years and more then 30 transactions - all of which the Wyly brothers would have been privy too. A Wikipedia post highlights those deals. Sterling Commerce Inc. was third in the Wyly brothers' insider trading scheme. In 2000, SBC Communications Inc. purchased Sterling Commerce. With the merger of AT&T Corp. and SBC Communications Inc. in November 2005, Sterling Commerce became an AT&T company and it was recently set up for another flip in a sale to IBM in May, 2010 for $1.4 billion. Fourth in the Wyly brothers' insider trading scheme was Scottish Annuity & Life Holdings Ltd., also known as Scottish Re Group Ltd (otc: SKRRF), whose thinly traded shares seemed un-phased by the charges.

Calling their actions "wreckless", the SEC said the Wyly brothers - and French - basically knew better than to trade on insider information, especially as holders of 5% or more of a company's shares. The Fed's said the Texas pair boldly traded in large block transactions over the course of 13 years. The SEC alleged that the Wyly brothers made a cool $31.7 million off of Sterling Software information alone - while serving as the company chairman and vice chairman (talk about balls!).

An SEC spokesperson commented to Tipreport saying, "they'll be singing soprano now."

Note: Links within this story related information can be found on Tip Report.

Source: TipReport.com  - A free online service for savvy investors who want to know the facts.