Post by anenro on Feb 1, 2020 18:35:39 GMT 4
Showdown Coming In Benjamin Wey’s Case Against FINRA
Benjamin Wey holds up his passport to show to the media after he leaves federal court, Wednesday
In 2015, Prosecutors in the Southern District of New York and the Securities and Exchange Commission accused Benjamin Wey, the founder of New York Global Group, of market manipulation associated with large blocks of shares he controlled through “reverse mergers” between Chinese companies and U.S. shell companies. In 2017, the charges and the case was dropped by both the SEC and SDNY. Wey has always maintained his innocence but after the cases were dropped, he wanted to find out how the feds got involved and who fed them information that led to his arrest. To date, he has focused on the roles that both NASDAQ and Financial Industry Regulatory Authority (FINRA) played in his case.
Wey is a Columbia Business School graduate and entrepreneur who was a leading consultant in reverse mergers for Chinese-based companies on the NASDAQ. His role was that of a facilitator with deep contacts in China business and knowledge of Wall Street. The combination made him wealthy and, later, a target when stories of financial mischief by Chinese-listed companies started to draw media attention. Even though none of the companies Wey worked with were found to have any financial fraud, he too became the focus of investigations at both FINRA and the NASDAQ.
Wey is not a FINRA member and his relationship with NASDAQ was nothing more than his holding shares in a number of companies that traded on the exchange. With regard to FINRA, Wey has focused on the role of FINRA and a December 2014 decision they made against two FINRA members, Talman Harris and William Scholander. Harris and Scholander were later indicted and convicted on charges related to FINRA’s actions against the two. Both served terms in prison.
FINRA named Wey “Person A” in its decision on Deer Consumer Products, Inc., a China-based company that did a reverse merger on the NASDAQ. FINRA stated that both Harris and Scholander “Hearing Panel's findings that respondents committed fraud and engaged in outside business activities violations. We also affirm the bars imposed by the Hearing Panel for respondents' fraudulent omissions.”
One of those on the FINRA National Adjudicatory Council was Christopher Brummer, a professor at Georgetown University Law School. Brummer sued Wey for defamation in the NY State Supreme Court related to stories he claimed were backed by Wey in an on-line newsletter, TheBlot. That case is still pending but in a ruling by New York State Judge Lucy Billings on January 28, ruled that FINRA, an unrelated party in the lawsuit, “FINRA shall produce its communications about him with anyone other than him.” Wey believes those documents show communications between FINRA and government agencies including the SEC and Southern District of New York’s US Attorney Office. (Index No: 0153583/2015, Case name: Brummer, Christopher v. Wey, Benjamin Wey). Brummer provided a sworn affidavit in August 2018 where he stated, “Again, I have never made any findings of fact or made any written statement to FINRA, the SEC, NASDAQ, any government agency, agent or investigator that Mr. Wey, NYGG ...”
Brummer participated in a deposition in the case where he provided information on his role at FINRA. FINRA is also providing financial backing of Brummer’s lawsuit against Wey, which has exceeded $1 million thus far and expects to spend an additional $750,000. Such spending has Wey’s legal team wondering what makes this Brummer case so important. Their belief is that there are d**ning communications between FINRA and the authorities that went after Wey. Even though Wey was the defendant in this case, it looks like FINRA, who wasn’t even named, may produce documents that will help Wey’s defense and his offense. There is a hearing scheduled in Wey v Nasdaq on February 11 in the New York County courthouse where he is alleging that Nasdaq too provided information to federal authorities that was both inaccurate and misleading. In that lawsuit, Wey is seeking over $650 million in damages in that case.
While authorized by Congress, FINRA is a private non-profit that is not part of the government, a key distinction that enables FINRA to have more autonomy over compensation than other regulators. The average FINRA employee took home roughly $193k in pay in 2017, with several of its top execs netting over seven-figures. It is a complex organization that is about to experience of bit of transparency if Wey is successful in his lawsuits.
Benjamin Wey holds up his passport to show to the media after he leaves federal court, Wednesday
In 2015, Prosecutors in the Southern District of New York and the Securities and Exchange Commission accused Benjamin Wey, the founder of New York Global Group, of market manipulation associated with large blocks of shares he controlled through “reverse mergers” between Chinese companies and U.S. shell companies. In 2017, the charges and the case was dropped by both the SEC and SDNY. Wey has always maintained his innocence but after the cases were dropped, he wanted to find out how the feds got involved and who fed them information that led to his arrest. To date, he has focused on the roles that both NASDAQ and Financial Industry Regulatory Authority (FINRA) played in his case.
Wey is a Columbia Business School graduate and entrepreneur who was a leading consultant in reverse mergers for Chinese-based companies on the NASDAQ. His role was that of a facilitator with deep contacts in China business and knowledge of Wall Street. The combination made him wealthy and, later, a target when stories of financial mischief by Chinese-listed companies started to draw media attention. Even though none of the companies Wey worked with were found to have any financial fraud, he too became the focus of investigations at both FINRA and the NASDAQ.
Wey is not a FINRA member and his relationship with NASDAQ was nothing more than his holding shares in a number of companies that traded on the exchange. With regard to FINRA, Wey has focused on the role of FINRA and a December 2014 decision they made against two FINRA members, Talman Harris and William Scholander. Harris and Scholander were later indicted and convicted on charges related to FINRA’s actions against the two. Both served terms in prison.
FINRA named Wey “Person A” in its decision on Deer Consumer Products, Inc., a China-based company that did a reverse merger on the NASDAQ. FINRA stated that both Harris and Scholander “Hearing Panel's findings that respondents committed fraud and engaged in outside business activities violations. We also affirm the bars imposed by the Hearing Panel for respondents' fraudulent omissions.”
One of those on the FINRA National Adjudicatory Council was Christopher Brummer, a professor at Georgetown University Law School. Brummer sued Wey for defamation in the NY State Supreme Court related to stories he claimed were backed by Wey in an on-line newsletter, TheBlot. That case is still pending but in a ruling by New York State Judge Lucy Billings on January 28, ruled that FINRA, an unrelated party in the lawsuit, “FINRA shall produce its communications about him with anyone other than him.” Wey believes those documents show communications between FINRA and government agencies including the SEC and Southern District of New York’s US Attorney Office. (Index No: 0153583/2015, Case name: Brummer, Christopher v. Wey, Benjamin Wey). Brummer provided a sworn affidavit in August 2018 where he stated, “Again, I have never made any findings of fact or made any written statement to FINRA, the SEC, NASDAQ, any government agency, agent or investigator that Mr. Wey, NYGG ...”
Brummer participated in a deposition in the case where he provided information on his role at FINRA. FINRA is also providing financial backing of Brummer’s lawsuit against Wey, which has exceeded $1 million thus far and expects to spend an additional $750,000. Such spending has Wey’s legal team wondering what makes this Brummer case so important. Their belief is that there are d**ning communications between FINRA and the authorities that went after Wey. Even though Wey was the defendant in this case, it looks like FINRA, who wasn’t even named, may produce documents that will help Wey’s defense and his offense. There is a hearing scheduled in Wey v Nasdaq on February 11 in the New York County courthouse where he is alleging that Nasdaq too provided information to federal authorities that was both inaccurate and misleading. In that lawsuit, Wey is seeking over $650 million in damages in that case.
While authorized by Congress, FINRA is a private non-profit that is not part of the government, a key distinction that enables FINRA to have more autonomy over compensation than other regulators. The average FINRA employee took home roughly $193k in pay in 2017, with several of its top execs netting over seven-figures. It is a complex organization that is about to experience of bit of transparency if Wey is successful in his lawsuits.