News
US Govt. intervenes in Hamilton lawsuit
View(s):- UK Financial Times on the mysterious ‘global financier’ suing Sri Lanka
By Robin Wigglesworth
The case has been brought by Hamilton Reserve Bank (HRB) in St Kitts & Nevis. Somehow, a small bank based in a country with 50,000 inhabitants and GDP of under $1bn has amassed a $250mn face-value stake in a Sri Lankan bond.
This specific bond was issued in happier times (2012) and lacks some now-common clauses that make bonds easier to restructure, as Alphaville contributors Mitu Gulati and Mark Weidemaier have written. In essence, HRB’s $250mn is enough in theory to veto any restructuring proposal Sri Lanka makes to that specific security.
Chinese-American financier (R) Benjamin Wey
So far, so usual. There are hedge funds that specialise in sniffing out vulnerable sovereign bonds, amassing a blocking stake, waiting patiently for a broader restructuring to take place, and holding out for full repayment once a country has secured debt relief from other creditors. It’s called being a “holdout”.
But the size of HRB’s stake — and the unusual aggressiveness of its lawsuit against Sri Lanka, which began almost as soon as it defaulted in April 2022 — always smelled a bit fishy.
The US government suddenly and obliquely saying it wanted to get involved made the whole situation even more intriguing. The US will occasionally file “amicus briefs” laying out its views on contentious legal cases where it has pressing national interests (that seems to be the issue here), but it hardly ever gets involved in something as routine like this.
The facts aren’t really in dispute: Sri Lanka really has defaulted on the bond in question, and although HRB’s legal zealousness will be a massive headache to Sri Lanka at a perilous time, it’s not the kind of thing the US government would normally stick its oar in over.
So is there something else going on?
We’d heard whispers about who might be behind HRB’s lawsuit, and last week Sri Lanka’s law firm Clifford Chance for the first time said explicitly who it thinks is driving this: a Chinese-American financier called Benjamin Wey.
From Clifford Chance’s motion for a six-month stay of litigation, with Alphaville’s emphasis:
. . . It is worth noting that — despite HRB’s claims to be a “bona fide” investor — there are serious questions about the nature of HRB’s alleged ownership interest. In addition, recently learned information suggests that HRB may have legal and regulatory problems of its own. Among other things:
— HRB and its sole shareholder — Fintech Holdings Ltd. — appear to be affiliated with Benjamin Wey, who is no stranger to legal controversy.
— In 2022, Fintech Holdings Ltd. acquired a troubled Puerto Rico bank, renaming it Hamilton International Reserve Bank LLC (“HIRB”). According to a Puerto Rico newspaper, HIRB’s subsequent transfer of customer accounts to HRB has generated controversy among customers and regulatory scrutiny.
— HRB’s affiliate Fintech Bank (whose principal officer has submitted declarations on behalf of HRB, see Docs. 48, 52, 61) was recently restricted from carrying out “licensed activities” by its Labuan regulator for “non-compliance to minimum capital and/or other regulatory requirements.”
We’ve emailed Clifford Chance to request additional information, and have asked both HRB and HRB’s lead lawyer Evan Kubota at Bleichmar Fonti & Auld to see if they would confirm Wey’s involvement. We’ve also pinged Wey on LinkedIn, and his lawyer by email. No one has replied yet. We’ll update this post if they do.
Wey is . . . an interesting chap. His personal website describes him as a “philanthropist and global financier”, whose “optimism and impressive winning streaks in the face of daunting odds” and “abilities to overcome obstacles continue to propel him and his clients into greater successes”. Wey’s Twitter X profile tags a registered trade mark symbol to his name.
Notoriety stems mostly from his promotion of a wave of Chinese reverse mergers as president of New York Global Group.
In 2015 he was arrested for fraud, but charges were eventually dropped in 2017 after a federal judge threw out evidence that prosecutors had obtained in a search of his apartment and office.
Separately, the New York Post dubbed Wey the “Horndog CEO” after he had to pay $18mn to an intern he had sexually harassed (later reduced to $5.65mn). Along the way he also appears to have run an online clickfarm called The Blot which he used to smear the former intern, journalists who had written about his travails and other people that had crossed him, in between a steady stream of generic internet content.
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