The wealthy Texas investor Samuel Wyly persuaded a federal judge to curb potential civil fines in a U.S. Securities and Exchange Commission lawsuit accusing him and his late brother, Charles, of running a $550 million fraud and conducting insider trading. While letting the regulator pursue many other claims, including recovery of alleged ill-gotten gains, U.S. District Judge Shira Scheindlin in Manhattan on Thursday said the SEC could not pursue civil penalties for much of the 13-year period in which the alleged misconduct occurred. The decision is among the earliest to apply February's unanimous U.S. Supreme Court ruling in SEC v. Gabelli, which said a five-year period for the SEC to seek civil penalties for fraud begins when the fraud ends, not when it is discovered. Samuel Wyly, 78, said that window in his case ran from Feb. 1, 2001 to Feb. 1, 2006, when he and his brother entered a tolling agreement with the SEC, and did not cover activity that the SEC said stretched back to
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