Token Communities Ltd (TKCM)

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SEC Charges Multiple Defendants with Investment Fraud Scheme Involving Penny Stock Companies

Litigation Release No. 25414 / June 9, 2022

Securities and Exchange Commission v. Trends Investments Inc. et al., Civil Action No. 1:22-cv-10889 (D. Mass. filed June 8, 2022)

The Securities and Exchange Commission charged one company and five individuals in connection with a securities fraud scheme involving the offer and sale of stock in two publicly traded penny stock companies.

According to the SEC's complaint, Trends Investments Inc., an unregistered entity, and Trends personnel Clinton Greyling of Florida, Leslie Greyling (Clinton's father, a resident of the United Kingdom), and former Massachusetts resident Brandon Rossetti engaged in a scheme to defraud investors in private offers and sales of shares of two publicly traded penny stock companies, Alterola Biotech Inc. and Token Communities Ltd. The Greylings and Rossetti allegedly lied to investors about whether Trends owned and could deliver to investors the shares it claimed to be selling. They are further charged with making a variety of misrepresentations to investors in order to keep investor funds, obtain further investments, placate investor concerns, and avoid detection. According to the complaint, Rossetti also acted as an unregistered broker by soliciting investors, receiving transaction-based compensation from Trends, and claiming to be a "broker" or "wealth manager."

The SEC's complaint also charges New York resident Roger Bendelac with participating in the scheme by placing manipulative trades in one of the securities Trends was offering and selling to investors, including through the use of two relatives' brokerage accounts to purchase securities which Bendelac sold from a different brokerage account. The SEC's complaint also alleges that Bendelac's relative, New York resident Thomas Capellini, gave Bendelac access to Capellini's brokerage account and funded the account so that Bendelac could place manipulative trades.

The SEC's complaint, filed in federal court in Boston, Massachusetts, charges Trends, Clinton Greyling, Leslie Greyling, and Rossetti with violating Section 17(a) of the Securities Act of 1933 ("Securities Act") and Section 10(b) of the Securities Exchange Act of 1934 ("Exchange Act") and Rule 10b-5 thereunder. The complaint also charges Rossetti with violating Section 15(a) of the Exchange Act, charges Bendelac with violating Sections 17(a)(1) and (3) of the Securities Act and Sections 9(a)(2) and 10(b) of the Exchange Act and Rules 10b-5(a) and (c) thereunder, as well as aiding and abetting Trends', Rossetti's, and the Greylings' violations, and charges Capellini with aiding and abetting Bendelac's violations. The SEC's complaint seeks remedies that include injunctions, disgorgement, prejudgment interest, civil penalties, and penny stock bars. Without admitting or denying the allegations, Clinton Greyling has consented to the entry of a judgment permanently enjoining him from future violations of the charged provisions. In addition, Clinton Greyling has consented to a penny stock bar. The settlement, which is subject to court approval, would leave disgorgement, prejudgment interest, and civil penalties to be determined by the court at a later date.

The SEC's case is being handled by by J. Lauchlan Wash, Trevor Donelan, David M. Scheffler, and Amy Gwiazda of the SEC's Boston Regional Office. The SEC appreciates the assistance of the Financial Industry Regulatory Authority (FINRA), the Colorado Division of Securities, and the Florida Office of Financial Regulation.

https://www.sec.gov/litigation/litreleases/2022/lr25414.htm
Complaint
https://www.sec.gov/litigation/complaints/2022/comp25414.pdf