The Securities and Exchange Commission has charged Sam and Charles Wyly, two politically powerful brothers and major GOP donors, with $550 million in insider trading and securities fraud.

The S.E.C. case, which was filed in Federal District Court in Manhattan, centers on charges of securities fraud and insider trading related to the shares of companies founded by the Wyly bothers or where they served as directors or executives. They include the retail craft chain Michaels Stores, Sterling Software, Sterling Commerce and Scottish Annuity and Life Holdings.

The ill-gotten gains, according to the S.E.C., were used to buy tens of millions of dollars of art, collectibles and jewelry; $100 million of real estate, including two ranches in Aspen, Colo., and a 100-acre horse farm near Dallas; and for charitable contributions, including $10 million to the business school at Samuel Wyly’s alma mater, the University of Michigan.

The charges are the result of a six-year investigation that began in 2004 when Bank of America reported to the S.E.C. that it had terminated numerous accounts held in the name of companies based in the Isle of Man because it could not determine who actually owned the companies.

This is the latest in a flurry of activity for the SEC. In addition to settling a fraud case with Goldman Sachs for the largest fine in their history, $550 million, the agency wrapped a $75 million settlement from Citigroup for failure to disclose subprime mortgage investments, and they are investigating the CEO of Moody’s for curiously timed stock sales. While the settlements wound up being less than expected and too small to make a dent in the operations of the mega-banks cited (In particular, Citi settled for $1 out of every $500 it hid), there does seem to be a resurrection of activity from the SEC under the new leadership of Mary Schapiro. It’s certainly more aggressive than the Chris Cox years.

The Wyly brothers have had a long history of bankrolling GOP campaigns. They were major investors in the Swift Boat Veterans for Truth, and provided a lot of backing for George W. Bush. The SEC finds that they basically controlled shell companies in the Cayman Islands with hundreds of millions in tradable assets, without disclosing them as per regulatory rules. While this is a civil case, it could lead to a criminal inquiry from the Justice Department.

Perhaps even better than all this, the SEC basically put the financial reform bill off-limits to lobbying and altering, vowing to abide by the spirit of the lawmakers’ text and implement the rules faithfully. Administrator Schapiro even opened a public comment page to invite suggestions for regulatory implementation of the law.