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NEW YORK (AP) — The founder of a Wall Street firm who was recently ordered to pay $18 million after losing a sexual harassment lawsuit was arrested on securities fraud charges Thursday, accused of making tens of millions of dollars illegally by manipulating stock prices.
Benjamin Wey, 43, was arrested at his Manhattan home. The founder and president of New York Global Group, an investment consulting firm, was charged with conspiracy to commit securities fraud and wire fraud, along with separate counts of securities and wire fraud. If convicted, he could face up to 90 years in prison.
After an initial appearance in Manhattan federal court, Wey was freed on $10 million bail secured by $2 million in equity in a Sag Harbor home. He was required to wear an electronic bracelet. His lawyer, David Siegel, declined to comment outside court.
An indictment unsealed Thursday also brought similar charges against Wey's Geneva, Switzerland-based banker, who remained at large. Civil charges were brought by the Securities and Exchange Commission against both men.
Prosecutors said in court papers that Wey made tens of millions of dollars illegally from 2007 through 2011 by manipulating the stock prices of companies he gained a secret financial interest in through transactions between Chinese companies and U.S. shell companies.
"Ben Wey fashioned himself a master of industry, but as alleged, he was merely a master of manipulation," U.S. Attorney Preet Bharara said in a release. "As alleged, in making tens of millions in illicit profit, Wey refused to let the securities laws or the rules of a fair marketplace get in the way of his dishonest scheme."
According to court documents, Wey carried out his scheme by getting the issuers of thinly-traded, over-the-counter stocks to apply for listings on Nasdaq so he could use two retail brokers in Manhattan to solicit customers to buy shares. Prosecutors said that as stock values rose, Wey collected millions of dollars in proceeds by selling them at artificially inflated prices.
Authorities said Wey caused millions of dollars to be transferred between U.S. and overseas accounts. In one instance, more than $20 million in cash was transferred from a Hong Kong account to bank accounts in the United States that Wey or his wife controlled, they said.
In June, a jury awarded $18 million to a young Swedish woman who sued Wey for sexual harassment. The 25-year-old woman, Hanna Bouveng, of Vetlanda, Sweden, had accused Wey of using his power as a Wall Street executive to coerce her into four sexual encounters before firing her after discovering she had a boyfriend.
New York Global Group has said on its website that it is a U.S. and Asia-based advisory, venture capital and private equity investment group with access of about $1 billion in capital.
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