The widow of investor Charles Wyly filed for bankruptcy in Texas after a Manhattan jury found her husband and billionaire brother-in-law ran a stock fraud that made them $550 million in illegal trading profits.

Caroline Wyly, 81, owes $101.2 million to the Securities and Exchange Commission, which won the jury trial against the Wyly brothers in May, according to a Chapter 11 petition filed today U.S. Bankruptcy Court in Dallas, where she lives.

Her brother-in-law, Samuel Wyly, filed for bankruptcy in the same court four days ago, citing a need to preserve assets as he and his late brother’s estate face a forfeiture order of about $300 million.

A federal judge in Manhattan today expressed frustration with the bankruptcy filings, saying they won’t block the SEC’s case against the Wylys from going forward. U.S. District Judge Shira Scheindlin also said she will temporarily freeze the Wylys’ assets.

“I’m not very happy now, as you might suspect,” Scheindlin said in a hearing.

Scheindlin agreed to the SEC’s requests for the asset freeze and for expedited fact-finding and an accounting of the Wylys’ assets.

“An injunction must be issued that protects assets that might be depleted or dissipated before a final judgment” in the SEC case, Scheindlin told lawyers.

Excessive Fines

Scheindlin also rejected the Wylys’ argument that the $300 million forfeiture may violate a provision in the U.S. Constitution barring the imposition of excessive fines.

The brothers, who gained prominence developing companies including Bonanza Steakhouse and Michaels Stores Inc., perpetrated the fraud for 13 years, according to the SEC. They also profited from using information gained from sitting on the board of Sterling Software Inc. and accumulating shares ahead of the company’s sale to Computer Associates International Inc., the agency said.