It’s just not insider trading.
U.S. District Judge Shira Scheindlin in New York said the Securities and Exchange Commission failed to show that the Wylys possessed material nonpublic information when they executed $40 million of offshore swap transactions in October 1999 involving a company they controlled, Sterling Software.
In May, a federal civil jury found Sam Wyly and the estate of Charles Wyly liable on nine other counts, including fraud for using a secret network of offshore trusts….
Despite Friday's ruling, the Wylys still face a potentially massive amount of damages based on the jury verdict….
The insider trading allegations centered on whether the Wylys had already decided to sell Sterling Software when they executed transactions involving shares of the company in October 1999, allowing them to profit when it was sold a few months later.
But Scheindlin said the Wylys took no concrete steps to sell the company until after the trades had been completed.
"While it is difficult to draw the line between inchoate desire and something more material, that line must be drawn somewhere," she wrote.