A federal appeals court on Friday refused to lift an asset freeze against relatives of Texas entrepreneur Sam Wyly, who along with his late brother's estate, faces a nearly $300 million judgment in a lawsuit by the U.S. Securities and Exchange Commission.

The three-judge panel of the 2nd U.S. Circuit Court of Appeals did, however, order a lower court to reconsider the freeze as to seven of the 16 relatives to ascertain whether they actually had received ill-gotten funds from the Wyly brothers.

The SEC sued Sam Wyly and his brother Charles in 2010, alleging that the brothers earned $553 million in undisclosed profits by trading in four companies they controlled, using trusts in the Isle of Man.

The companies included Sterling Software Inc., Michaels Stores Inc., Sterling Commerce Inc. and Scottish Annuity & Life Holdings Ltd., now Scottish Re Group Ltd.

Charles died in 2011, and his estate, left to his widow Caroline Wyly, took his place in the lawsuit.

U.S. District Judge Shira Scheindlin in Manhattan ordered Sam Wyly and Charles' estate to pay the SEC more than $299 million in September 2014. The SEC then sought to freeze their assets and those of 16 family members whom it believed had received funds from the brothers' trusts.

The following month, Sam Wyly and Caroline Wyly both filed for bankruptcy. Although bankruptcy normally puts a hold on litigation and efforts to collect judgments, Scheindlin granted the freeze anyway. She found that the SEC, as a government agency, was exempt from the bankruptcy hold.

The 2nd Circuit panel on Friday agreed that the bankruptcy filings did not prevent the freeze, but said there was not enough evidence that seven of the family members had received funds from the Wylys' trusts. It ordered Scheindlin to reconsider that issue.

A lawyer for the family members did not immediately comment on the ruling.

In addition to the SEC's judgment, the U.S. Internal Revenue Service is seeking to collect $3.2 billion in back taxes from Sam Wyly and the estate of Charles Wyly.

The case is U.S. Securities and Exchange Commission v. Wyly et al, U.S. Court of Appeals, 2nd Circuit, No. 144261.