News Column

Deal Maker Had Hand in Specter Suit, Filing Shows

March 29, 2012

Lou Kilzer

Arlen Specter
Arlen Specter

A lawsuit brought by former U.S. Sen. Arlen Specter of Pennsylvania and a co-counsel charging the Nasdaq stock exchange with discrimination against Chinese manufacturer CleanTech Innovations Inc. was orchestrated by controversial Wall Street deal maker Benjamin Wey, according to a new court filing.

Co-counsel Fensterstock & Partners LLP charges that Wey fought Nasdaq over the delisting of solar tower maker CleanTech because Wey and his firms had $20 million at stake. Fensterstock states in the new filing that Wey and CleanTech stiffed it over $400,000 in legal bills.

The filing in New York Supreme Court does not say how much money, if any, is owed to Specter.

That action includes a copy of a $50,000 check dated Dec. 14, 2011, written to Fensterstock by Wey marked "CleanTech legal retainer." Though Wey was pulling the strings, he was not a named party in the original lawsuit against Nasdaq, according to Fensterstock.

Spokesmen for Wey and Specter could not be reached for comment on Wednesday.

A week after CleanTech and Wey retained Fensterstock, the law firm and Specter filed the lawsuit against Nasdaq, claiming the exchange discriminates against Chinese companies in general and CleanTech in particular. In that lawsuit, Wey, who has been labeled by a top Nasdaq official as "notorious," is referred to only as "the Consultant."

In January, the FBI raided Wey's offices and home in New York for undisclosed reasons. Wey, a naturalized American citizen, has been the center of controversy over his backing of certain Chinese companies that have used a nontraditional practice to be listed on American stock exchanges. Such companies purchase defunct American shell companies and convert them into American holding companies with substantially all of their assets sequestered in China.

These "reverse mergers" allow Chinese companies to be listed on American exchanges without costly registration with the Securities and Exchange Commission.

Wall Street cooled on the sector last year after an investor alleged fraud in a lawsuit.

Though Nasdaq cited Wey's association with CleanTech as a reason for delisting the company, Fensterstock's lawsuit for legal fees details the depth of Wey's involvement.

Not only did Wey write a check for the legal retainer, but "from the early stage, Wey and [his company] attempted to set the course of the Nasdaq litigation," Fensterstock said.

Wey played a key role in drafting legal matters, according to the lawsuit for legal fees. In an email, for instance, he told the lawyers not to mention his companies "anywhere in the complaint." They did not.

As the discrimination suit against Nasdaq made its way through state and federal courts, Specter appeared pleased. In an email to Blair Fensterstock, Fensterstock's managing partner, the former senator called one federal motion "comprehensive and accurate. It raises very important issues in the interest of our international trade practices."

Specter questioned Chinese business practices while serving in the Senate. When his 30-year career ended on Jan. 3, 2011, he opened a law firm in his native Philadelphia.

Wey sent Fensterstock and Specter emails of news reports about the discrimination suit in January, including one about a broadcast on a TV network in China. He wrote: "Congrats to you for becoming more famous in Asia through CleanTech. Keep pushing!"

By Feb. 15, Fensterstock advised Specter that CleanTech payments were behind schedule, the lawsuit for the fees states.

Source: (c) 2012 The Pittsburgh Tribune-Review (Greensburg, Pa.)

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