|Samuel E. "Sam" Wyly|
October 4, 1934 |
East Carroll Parish
|Residence||Dallas, Texas, USA|
|Alma mater||Ross School of Business|
(1) Rosemary Wyly (married 1960-1976, divorced)
|Parent(s)||Charles, Sr., and Flora Wyly|
|Relatives||Charles Wyly (brother)|
Samuel E. Wyly, known as Sam Wyly (born October 4, 1934), is an American entrepreneur and businessman, philanthropist, and major contributor to conservative campaigns and candidates. In 2006, Forbes magazine estimated his net worth at $1.1 billion. His older brother, Charles Wyly, Jr., was nearly equal in wealth; the two brothers were close with their business affairs, and were often referred to as the "Wyly brothers". Wyly's memoir, 1,000 Dollars and an Idea: Entrepreneur to Billionaire, was published in September 2008.
Early life and education
Wyly was born in Lake Providence, the parish seat of East Carroll Parish in northeastern Louisiana and one of the poorest communities in the United States. He began working at an early age, helping his father, Charles Wyly, Sr., and mother, Flora Wyly, to publish a weekly newspaper, The Delhi Dispatch in Delhi in Richland Parish. He sold advertising, wrote stories, folded and addressed the finished papers, and cleaned the printing presses.
Following high school, Wyly went to Louisiana Tech University. He worked his way through college by selling class rings. In 1952, known as the time as "Bubba" Wyly, he was the head page in the Louisiana House of Representatives, recalled one of the young men who worked under his supervision, Jasper "Jake" Smith, III, son of State Representative Jasper K. Smith of Caddo Parish. The Wyly brothers later honored one of their Tech professors, Robert C. Snyder, of the English department, with an endowed chair.
Following graduation, Wyly went to the University of Michigan's Ross School of Business in Ann Arbor, Michigan, where in 1957 he received a Master of Business Administration degree before such credentials became so recognized. He is one of five Michigan Business School graduates who are billionaires. He was able to attend only because of a new scholarship program, having enrolled as the school's first Paton scholar .
After receiving his MBA Wyly moved to Dallas to work as a salesman at IBM's Service Bureau Corporation. Three and a half years later he left IBM to become the area sales manager for Honeywell, establishing their computer business in Dallas and Oklahoma.
Wyly's wealth comes from businesses that he founded and developed, or purchased and expanded;
- 1963: founded University Computing Company (UCC), which provided computer services to engineers, scientists, and researchers with Sun Oil Company, Texas Instruments, and others. He began the company with $1,000 and three customers;. The company went public in 1965. By 1968, sales were $60 million; in 1971, they were $125 million.
- 1967: With his brother Charles, bought the restaurant chain Bonanza Steakhouse. He had initially started investing in it with money from the sale of stock in UCC. The company grew to approximately 600 restaurants by 1989, when the two brothers sold it.
- 1968: Acquired Gulf Insurance; at the time, the company had free equity of $52 million and $63 million unrealized capital gains.
- Co-founded Earth Resources Company, an oil refining and silver and gold mining company, served as its Executive Committee Chairman from 1968 to 1980.
- 1970: Purchased Computer Technology, which functioned as the in-house data processing unit for LTV, for $40 million in cash and notes.
- 1972: Sold a computer terminal business to Harris-Intertype, writing off $32 million in investments.
- 1973: Divided UCC into four companies, including Datran, which began construction of a nationwide system of microwave towers to transmit data among 27 American cities in direct competition with AT&T.
- 1981: Co-founded Sterling Software. The company was sold to Computer Associates in 2000 for $4 billion.
- 1982: Bought controlling interest in an arts-and-crafts chain Michaels; the company's revenues grew from $10 million at the time of purchase to $1.24 billion by 1996. In July 2006, Bain Capital and the Blackstone Group purchased the company for $6 billion.
- 1986: Purchased Frost Bros., a specialty retail chain, from Manhattan Industries. After failing to reorganize while operating under bankruptcy protection, the company was liquidated in mid-1989.
- In 1990, co-founded hedge fund Maverick Capital, which by 2003 had about $8 billion in assets. Beginning in 1993, his son Evan, a Maverick co-founder, and money manager Lee S. Ainslie III managed the fund.
- In 2006 Wyly also was the largest investor in the online social networking company Zaadz.com at an estimated 1.5m.
- In March 2007, Forbes magazine estimated Wyly's net worth to be $1.1 billion. In September 2006, Forbes ranked him as the 354th wealthiest American.
Cheryl and Sam Wyly purchased Explore Booksellers and Bistro in January 2007, ending concern by Aspen, Colorado locals that one of the largest independent bookstores in the area would be sold to real estate investors.
Sam wrote his memoir, 1,000 Dollars & an Idea: Entrepreneur to Billionaire, in 2008 (Newmarket Press).
His illustrated biography, Beyond Tallulah, How Sam Wyly Became America’s Boldest Big-Time Entrepreneur, by Dennis Hamilton (Melcher Media) was published in 2011.
Sam and his son, Andrew Wyly, (with a Foreword by Walter Isaacson), wrote Texas Got It Right! in October, 2012 (Melcher Media).
In March 2007, commenting on the purchase of a local bookstore by Wyly and his wife Cheryl, the Aspen Times noted that the Wyly family "has been known not only for its philanthropic efforts, but also its large contributions to conservative political campaigns and candidates." Wyly and his brother Charles have personally given about $10 million to Republican causes and candidates between the early 1970s and 2006, they say; both are Bush Pioneers.
In 2000, Sam Wyly contributed $2.5 million to a group called "Republicans for Clean Air", which ran ads praising George W. Bush's environmental record and criticizing that of John McCain. The ads ran in New York, Ohio, and California in advance of early March primaries, at a time when Bush and McCain were locked in a tight struggle for the Republican presidential nomination. It initially was unclear who was behind the group or who paid for the ads until Wyly stepped forward to take the credit.
In 2004, Wyly also donated $20,000 to the Swift Boat campaign that raised questions about Sen. John Kerry's military record in Vietnam, helping scuttle Kerry's challenge to Bush. Wyly said in 2008 that he was not leaning toward either Republican John McCain or Democrat Barack Obama in that year's presidential campaign, and would not get involved in the race.
Wyly and his late brother Charles spent more than ninety million dollars on a wide range of charities. In 1968, he set up the Sam Wyly Foundation to help minority businessmen. He also helped to start an educational TV channel in Dallas.
With Charles, he funded the Charles Wyly Sr. Tower of Learning, designed by the Bastrop architect Hugh G. Parker, Jr., on the Louisiana Tech campus, in memory of their father. The building includes a computer center and the university library. He also made a $10 million gift for Sam Wyly Hall, at the University of Michigan (2000), and is a significant supporter of the Aspen Writers' Foundation.
Controversy and bankruptcy
In 1979, Wyly settled Securities and Exchange Commission charges that he made undisclosed payments to associates to buy up company bonds as part of a plan to stave off bankruptcy. He settled without acknowledging any wrongdoing.
In August 2006, the Dallas Morning News reported that Sam and Charles Wyly were under investigation by the SEC, a grand jury in Dallas and a grand jury in New York, regarding their use of potentially illegal offshore tax shelters. Senate investigators allege that the Wyly brothers used the offshore trusts to buy $30 million worth of artwork, jewelry, furniture and other items for their personal use. The Wyly brothers denied any wrongdoing, and stated that they just followed the advice of their financial advisers. They told the Senate Permanent Investigations subcommittee investigating the offshore tax shelters that they would invoke their Fifth Amendment right against self-incrimination; they were not called to testify.
On July 29, 2010, the Securities and Exchange Commission charged Charles and Sam Wyly with fraud for violating federal securities laws governing ownership and trading of securities by corporate insiders. The Wyly brothers are alleged to have profited by more than $550 million in undisclosed gains. The charges state that this occurred through the trading of stock in public companies that the brothers were serving as board members. They allegedly, through hidden entities located in foreign jurisdictions, concealed their ownership and trading of those securities. On May 12, 2014, a jury found the Wyly brothers guilty of the charges.
On October 19, 2014 Sam Wyly filed for bankruptcy after having lost a fraud case brought by the SEC. In April 2015, the Internal Revenue Service filed claims amounting to 3.2 billion dollars for unpaid income taxes, interest and penalties against Wily and the estate of his late brother. His lawyer called the IRS claims "unfair and absurd."
Wyly and his brother Charles, older by a year, were close all their life. They played high school football, attended Louisiana Tech University, and joined Pi Kappa Alpha Fraternity together. The brothers have worked together in a large number of businesses they've owned or run.
From 1960 to 1976, Wyly's wife was named Rosemary. In 1978 in Dallas, he married Victoria L. Steele.In August 2006, Wyly and his third wife, Cheryl, lived in a 8,450-square-foot (785 m2), $7.48 million house in Highland Park, Texas. Wyly has six adult children from his first two marriages.
- Wyly, Sam (September 2008). 1,000 Dollars and an Idea: Entrepreneur to Billionaire. Newmarket. p. 256. ISBN 978-1-55704-803-5.
- Rigoni, Gene. "Sam Wyly 'Innovates To Opportunity' Time And Time Again", Monroe Street Journal, Stephen M. Ross School of Business, University of Michigan, January 13, 1997
- "The 400 Richest Americans: #354, Samuel Wyly", Forbes magazine, September 21, 2006
- "Sam Wyly, Chairman, Sterling Software Inc. and Michaels Stores, Inc.", Horatio Alger Association of Distinguished Americans, retrieved September 21, 2007
- Jake Smith, Dinner with Mobutu: A Chronicle of My Life and Times. Xlibris Corporation. 2005. p. 45. ISBN 978-1413499438. Retrieved June 9, 2014.
- "Robert C. Snyder Obituary". Shreveport Times, June 12, 2011. Retrieved June 21, 2011.
- Doyle, Rebecca A. "Sam Wyly Hall officially opens", University Record, University of Michigan, April 17, 2000
- "Man With his Back to the Wall: With his Once-proud Empire Crumbling Around him, UCC’s Sam Wyly is Still Hanging on"f, Forbes magazine, June 1, 1973, accessed September 22, 2007
- Sterling Software filing with the SEC, Form:10-K/A, filing date: January 26, 1994
- Stephanie Anderson Forest, "Sam Wyly's Hedge-Fund Fiasco: Hiring a "family friend" brought lawsuits instead of fat returns", Business Week, September 1, 2003
- "The World's Billionaires", Forbes magazine, March 8, 2007
- Curtis Wackerle, "Explore building under contract to Wyly family", Aspen Daily News, January 29, 2007
- Rick Carroll, "End of an era: Explore sells for $4.6 million", Aspen Times, March 6, 2007
- Katie Fairbank and Sudeep Reddy, "Billionaire brothers under a microscope: They're known for gifts to charities, politics, but tax shelters scrutinized", Dallas Morning Times, August 27, 2006
- Joe Conason, "Tit for tat?", Salon magazine, March 6, 2000
- Laura Meckler, "FCC Probing Group That Paid For Bush Ads", The Associated Press, March 9, 2000
- David Koenig, "Billionaire Wyly says anyone can match his success" at the Wayback Machine (archived September 17, 2008), Associated Press, September 15, 2008
- Barry Meier, "The View From GreenMountain; Financier Mixes Business, the Environment and Politics", New York Times, March 16, 2000
- Brendan M. Case, Selling secret accounts draws scrutiny: Senate report blasts Dallas firm for offshore services for the masses", Dallas Morning News, August 13, 2006
- David Cay Johnston, "U.S. blows the whistle on tax cheats: Evasion is rampant among the super-wealthy, report finds", International Herald Tribune, August 1, 2006
- SEC Charges Corporate Insider Brothers With Fraud, SEC, July 29, 2010
- "Wyly Brothers Charged with Fraud", New York Times, July 29, 2010
- SEC charges billionaire Texas brothers who donate to GOP with fraud, Zachary A. Goldfarb and Philip Rucker, Washington Post, July 30, 2010
- Matthews, Christopher M. (May 13, 2014). "SEC Wins Tax-Fraud Case Against Wyly Brothers". The Wall Street Journal. p. C1.
- Joseph Ax and Nate Raymond, Reuters (November 7, 2014). "SEC Wants Texas Businessman Sam Wyly To Pay $255 Million More For Involvement In Fraud Scheme". Business Insider. Retrieved December 26, 2014.
- Nate Raymond and Joseph Ax (October 20, 2014). "Texas investor Sam Wyly files for bankruptcy after losing SEC fraud case". Reuters. Retrieved December 26, 2014.
- Erik Larson (Oct 20, 2014). "Samuel Wyly in Bankruptcy Facing $400 Million Forfeiture". Bloomberg. Retrieved December 26, 2014.
- The Associated Press (April 17, 2015). "IRS seeks $3 billion from Texas businessman, late brother". The Seattle Times. Retrieved April 21, 2015.
- Hamilton, Dennis; (preface by Sam Wyly) (2011). Beyond Tallulah : how Sam Wyly became America's boldest big-time entrepreneur. New York: Melcher Media. ISBN 978-1-59591-069-1. OCLC 744978245.
- "Samuel Wyly". search.ancestry.com. Retrieved January 15, 2015.
- Official website of Sam and Charles Wyly
- Oral history interview with Sam Wyly, Charles Babbage Institute, University of Minnesota, by David Allison, December 6, 2002. Wyly recounts his childhood and education prior to going to work for IBM’s Service Bureau Corporation, and then joining Honeywell as an area sales manager. He discusses how he left Honeywell to form University Computer Corporation (UCC), a software services business. Wyly explains his growing focus on computing and telecommunications, his formation of Datran, and his unsuccessful attempt to acquire Western Union. Much of the interview focuses on ongoing developments at UCC, the eventual sale of this firm to Computer Associates, his formation of Sterling Software, its acquisition of Informatics, the sale of Sterling, and his ideas on the future of information technology.