Samuel Wyly and the estate of his late brother, Charles, ought to pay as much as $750 million for having used a web of offshore trusts to illegally hide stock holdings and evade trading limits, a lawyer for the Securities and Exchange Commission said.The commission cut the demand for damages almost in half after U.S. District Judge Shira Scheindlin rejected a request for $1.41 billion. The Dallas brothers, founders of Michaels Stores, perpetrated a fraud that earned them at least $550 million in illegal profit over 13 years, jurors in a Manhattan federal court found three months ago. A second trial began Monday before Scheindlin in which she will determine how much Wyly and the estate have to pay in fines and disgorgement. “The defendants knew they were doing something wrong and something quite risky,” Bridget Fitzpatrick, a lawyer for the SEC, told Scheindlin. “There was a decision to violate the law, your honor, and that decision was made in part because Sam Wyly believed that it would be profitable.” The Wylys concealed their transactions from 1992 to 2003, Fitzpatrick said.“The evidence is very clear that Sam and Charles Wyly continued to have the trusts buy whatever they wanted; they had access to hundreds of millions of dollars,” she said. The Wylys received at least $600 million in untaxed dollars, spending about $85 million on real estate and $30 million on art and jewelry, Fitzpatrick said.The Wylys took issue with those figures, arguing that they should be “far smaller than what the SEC claims” and urging the judge to “deny all of the SEC’s requested relief.” Lawyers for the Wylys did not make an opening statement. They argued in court papers that if the judge decides to impose a penalty, the Wylys shouldn’t have to pay more than $1.38 million. The trial may take three days, lawyers in the case said. Scheindlin ruled July 29 that regulators didn’t offer any proof to show that the trades by Isle of Man trusts controlled by the brothers “were unlawful, manipulated the market, distorted the price of the shares or constituted insider trading.” She ordered the agency to submit a lower damages request by Aug. 12.“It defies logic to presume that all of the rise in the value of a company’s stock price over 13 years — in the highly charged market of the ’90s tech bubble no less — is reasonably attributable to two directors’ failure to disclose their trading,” the judge said. Samuel Wyly testified in April that he didn’t violate federal securities laws. He said trustees on the Isle of Man had acted independently, approving transactions without his direction. The Wylys said they used the offshore trusts for tax purposes, estate planning and asset protection. They said they never concealed the offshore trusts and relied on the advice of “an army of lawyers” they trusted to ensure that they complied with the law.