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Thursday, June 13, 2024 | Back issues
Courthouse News Service Courthouse News Service

Investors Sue 6D Global and Its Indicted CEO

NEW YORK (CN) - A Wall Street executive who recently made headlines as the subject of a criminal indictment on securities violations and an $18 million civil verdict for sexual harassment now faces a federal class action by 6D Global Technologies Investors who claim they were defrauded.

The latest complaint, filed Tuesday in Manhattan federal court, claims 6D Global and its directors allowed Benjamin Wey to control the company and together engaged in an "ongoing scheme of stock price manipulation, fraud, violations of SEC rules and regulations, and undisclosed related party transactions."

According to the suit, when the scheme was revealed through a federal indictment unsealed Sept. 10 and an SEC action filed the same day, "NASDAQ halted trading of 6D Global securities, freezing the stock price at $2.90."

As a result, 6D Global stock was rendered "illiquid and virtually worthless thereby damaging investors," the investors say in the complaint.

A separate private action filed Sept. 28 by Discover Growth Fund accuses 6D Global directors of making false statements to induce the fund to enter into a $10 million stock purchase agreement, only later disclosing 6D Global was in fact controlled by Wey.

By concealing his ownership through reverse mergers between Chinese companies and U.S. shell companies, Wey was able to sell at artificially inflated prices and make tens of millions, according to the federal indictment of Wey.

Phillip Kim of The Rosen Law Firm filed Tuesday's suit on behalf of "a class consisting of all persons and entities who purchased the publicly traded common stock of 6D Global or its predecessor CleanTech Innovations, Inc. from Nov. 3, 2010 to Sept. 10, 2015."

"Our goal is to seek recovery for the numerous investors that have been damaged by this fraud," Kim told Courthouse News in an email.

6D Global did not immediately respond to a request for comment, and Wey's attorney could not be reached by press time.

The putative class seeks certification, compensatory damages against all defendants "jointly and severally" and costs.

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