Benjamin Wey

Benjamin Wey (Benjamin Tianbing Wei, Chinese: 魏天冰; pinyin: Wèi Tiānbīng)^[1][2] is a Chinese-born American Wall Street financier and CEO of New York Global Group (NYGG).^[3][4] He began his financial career as an investment advisor and broker in Oklahoma in the late 1990s. Wey and NYGG were among the most active "facilitators and promoters" of reverse takeovers that allowed small Chinese companies to raise capital on U.S. markets, until reverse takeovers became the subject of a U.S. Securities and Exchange Commission investigation in 2011.^[2][5]

In September 2015, Wey was indicted by the United States Department of Justice on charges of securities fraud, stock manipulation, money laundering, and wire fraud for his role in an alleged fraudulent scheme to profit from undisclosed, controlling ownership interests in several companies in the United States, including 6D Global Technologies Inc." ^{[6] [7]} He is also facing a defamation suit stemming from his attacks on a Financial Industry Regulatory Authority (FINRA) regulator and Georgetown University law professor in his internet magazine The Blot. According Bloomberg Businessweek, he has also used the publication to defame investigative journalists.^[8]

Early life and education

Wey was born in Tianjin, China. His father was a diplomat with the Ministry of Foreign Affairs and his mother an electrical engineer. He went to the United States on a full scholarship (according to a 2010 interview)^[9] to study finance at Oklahoma Baptist University, graduating in 1992. While still at college, he had his own trade business which he continued after his graduation while at the same time studying at the University of Central Oklahoma for a master's degree in Business Administration which he received in 1999.^[10] According to his official biography, he later received a second MBA from Columbia Business School.^[3]

Career

He began his financial career in Oklahoma where he worked as an investment advisor and broker. In 2000, he became the CEO of the Oklahoma-based Benchmark Global Capital Group. In 2002 Wey was fined $5,000 and suspended by the U.S. National Association of Securities Dealers, now FINRA, for "maintaining accounts" at his brokerage firm without informing the firm in writing. The Oklahoma Department of Securities censured Way and banned him from operating in the state. They claimed that he had advised a retired 68-year-old woman to invest her entire life savings in the Nasdaq listed stock of Pharmaprint, a "risky penny stock," without disclosing that he was a paid consultant to the company. Without admitting or denying the allegations, Wey agreed to cease carrying out all brokerage and investment advisory business in the state.^[2][11]

Wey transferred his base of operations to New York City where he is the CEO of New York Global Group, a U.S. and Beijing-based financial firm that had managed 200 China-related transactions as of 2011, and was described by the Financial Times as a "key 'bridge' between fast-growing Chinese companies and US capital markets."^[2] The firm claims access to approximately $1 billion in capital.^[3] The firm is noted for reverse mergers, in which midsize Chinese companies are taken public in the United States by acquiring the corporate shells of U.S, companies that are no longer in operation and whose shares had previously been listed in an American equities market.^[12] The firm reported in 2009 that 15% of Chinese companies listed on the NASDAQ stock exchange were its clients.^[5] In 2011, the Swedish Financial Supervisory Authority found that the NYGG's company name was being fraudulently used in a case of corporate identity theft and described the identity theft as an advance fee fraud scheme.^[13] In May 2012, the United States Securities and Exchange Commission put out a similar alert warning the general public of concerning the fraudulent company maliciously using NYGG's name.^[14]

By 2012, regulators had stepped up action against certain Chinese reverse-takeover stocks, but according to the Financial Times had been hamstrung by lack of cooperation from Chinese regulators.^[15] Among such stocks were Bodisen Biotech, which was brought into the equity markets by NYGG and was delisted from the American Stock Exchange in 2007.^[16] The exchange cited "internal control weaknesses related to its accounting and financial reporting obligations" and "incomplete, inaccurate and/or misleading information related to its relationship with, and payments to, a consultancy firm and its affiliates" ^[17] Barron's reported in 2011 that "much of the universe of Chinese reverse mergers has become a swamp of revenue disappointments, earnings restatements and some outright frauds," and that Bodisen was "one early sinkhole."^[5]

In December 2010, the NASDAQ stock exchange delisted CleanTech Innovations Inc., a wind-tower manufacturer, citing its association with Wey, whom the exchange's senior vice president called "notorious" because of his past stock promotions. The NASDAQ delisting prompted a lawsuit in 2011 from CleanTech, which was represented by former U.S. senator Arlen Specter with Wey as a "consultant".^[18] The suit (later dismissed because the SEC had not yet rendered its own decision in the case) had accused NASDAQ of a "racially profiling set of procedures" that targeted the Chinese.^{[19][20][20][21]} Specifically, Cleantech's amended complaint alleged that "overt and systematic racially-motivated discriminatory acts" were the basis of Cleantech's delisting.^[19] In July 2013 in what Forbes called "a landmark decision", the U.S. Securities and Exchange Commission reversed NASDAQ's delisting of the company. The SEC specifically concluded that "[T]he record does not show that the specific grounds on which Nasdaq based its delisting decision exist in fact."^[20]

Wey solicits media attention and bills himself as an expert in U.S.-China trade relations.^[5] He has appeared on various TV media outlets including The Wall Street Journal TV,^[22] Fox Business News and TheStreetTV.^[23] In a Columbia Journalism Review column in 2010, financial journalist Felix Salmon cited Wey's pursuit of publicity as an example of persons receiving media placement because of the hiring of public relations representatives and not their expertise.^[23] Wey also publishes and writes extensively for the digital publication TheBlot (launched in 2013), where he describes himself as an "investigative reporter."^[24][25] As of 2016, he is facing a defamation suit stemming from his attacks on a FINRA regulator and Georgetown University law professor in the magazine.^[26] According Bloomberg Businessweek and the Columbia Journalism Review, he has also used the publication to defame and threaten investigative journalists.^[8][27]

In July 2014, Wey was sued by a former employee, who alleged that he was wrongfully fired after he reported that another employee was "repeatedly and consistently” the subject of "disgusting and degrading quid pro quo sexual harassment." Hannah Bouveng, the employee who had been the subject of the alleged harassment had filed an $850 million lawsuit against Wey's company earlier that month. Law360 quoted Wey as saying that the lawsuits were "frivolous" and "an extortion attempt."^[24] The sexual harassment trial opened on June 15, 2015 at the Manhattan Federal District Court. It closed on June 29, 2015 with the jury awarding Bouveng $18 million—$2 million in compensatory damages and $16 million in punitive damages, primarily for defamation by Wey, NYGG, and its subsidiary FNL Media who publish TheBlot. While the allegations of assault and battery were rejected, the jurors found in Bouveng's favour on the charges of sexual harassment, retaliation and defamation.^[28][29] In April 2016, the award was reduced to $5.6 million by a Federal District Court judge.^[30]

Wey's Wall Street offices had been searched by the Federal Bureau of Investigation in January 2012 as part of a continuing investigation. According to David Barboza writing in the New York Times, it was the "strongest indication yet" that US federal investigators may have started to probe the advisers and promoters involved in "so-called backdoor listings of Chinese companies."^[12][31][32] In September 2015, Wey was indicted by a U.S. federal grand jury on eight counts of conspiracy, securities and wire fraud, and money laundering in connection with his reverse merger scheme and involving the companies SmartHeat, Deer Consumer Products, and CleanTech Innovations. In addition to the criminal charges, the U.S. Securities and Exchange Commission filed a parallel civil lawsuit against Wey which also included as defendants Wey's wife, his sister, and two of his attorneys, all of whom were alleged by SEC complaint to have committed "violations or the aiding and abetting of violations of the antifraud provisions and the disclosure and reporting provisions of the federal securities laws".^[6][33][34]

Wey is one of at least two hundred Americans found using offshore accounts by the Panama Papers. He is accused of using the offshore accounts to cloak transactions between Chinese operating companies and American shell companies.^[35][36]

References

Further reading

• U.S. Securities and Exchange Commission Investor Bulletin, Reverse Mergers

External links

• Wey's website