Wall St mogul behind Chinese ¡®reverse mergers¡¯ is arrested

[Randy W]

in the SCMP, Reuters

 

Reversal of fortunes: Wall St mogul behind Chinese ‘reverse mergers’ is arrested

Benjamin Wey previously hit headlines after being ordered to pay US$18m in sex harassment and defamation case brought by ex-employee, former HK resident Hanna Bouveng

 

US prosecutors charged Wey and his Swiss-based banker, Seref Dogan Erbek, with conspiracy, securities fraud and other crimes.

Erbek remains at large.

 

. . .

 

Through a Beijing-based subsidiary, prosecutors said, Wey offered to help Chinese companies seeking to raise US capital by arranging reverse mergers, in which the Chinese companies took control of the US shell companies that are already publicly listed.

 

The manoeuvre allows a firm to raise funds by listing shares without the scrutiny of a public offering.

 

Wey got the companies listed on Nasdaq by fraudulently inflating the number of shareholders and hiding his ownership interest from the exchange, authorities said.

 

. . .

 

His attorney, David Siegel, said: “Mr Wey denies the charges against him and looks forward to clearing his name.”