Clinton Greyling Sentenced for Role in Unregistered Broker Scheme
On December 11, 2024, Clinton Greyling, 50, of Tamarac, Fla., was sentenced by U.S. District Court Judge Richard G. Stearns to one year of probation. He was also ordered to perform 200 hours of community service and to forfeit $229,576.
Greyling was charged on July 30, 2024 with one count of acting as an unregistered broker; aiding & abetting. Greyling agreed to waive the Indictment and plead guilty to one count of aiding & abetting an unregistered broker. As part of his plea agreement, Greyling also agreed to forfeit $628,610, but that sum was later reduced to $229,576.
According to the information in the case, Greyling was the President of Trends Investments Inc. (“Trends”), which sold securities of fledgling public companies that were engaged in mergers. Greyling was also the President of Trends Mergers & Acquisitions LLC, which claimed to specialize in “reverse merger activities for public companies.”
Between about February 2017 and about June 2019, Greyling assisted Individual 1 (identified in a parallel SEC action as Brandon Rossetti) in acting as an unregistered broker in connection with sales of Alterola Biotech Inc. (“Alterola”), which traded under the symbol ALTA and then ABTI, and Token Communities Ltd. (“Token”), which traded under the symbol TKCM, and other securities to individuals throughout the United States. Greyling, through his company, Trends, touted Alterola and Token Communities as promising companies that were about to enter new and exciting business lines via mergers. Trends, however, did not yet own the Alterola shares it purported to sell. And when Trends finally provided customers with their Alterola shares up to two and one-half years after receiving the customers’ money, the shares were often in restricted form, which precluded the customers from depositing and selling them in a timely manner. Similarly, the Token Communities shares that Trends sold to customers were ultimately worthless as a practical matter. Contrary to Individual 1’s representations, customers were generally unable to deposit or trade the securities because Token Communities failed to file all the necessary financial reports with the SEC in a timely fashion.
As part of the scheme, Individual 1 solicited customers to purchase securities from Trends by falsely holding himself out as a broker or wealth manager and telling customers that the securities were promising investments. However, Individual 1 was not registered as a broker with the SEC, as required.
Individual 1 forwarded customers wire payment instructions for Trends and received a commission from Trends of approximately 40 percent of the sales. Neither Individual 1 nor Greyling disclosed this exceptionally high commission rate to customers.
Through this scheme, Individual 1 generated more than $1.9 million for Greyling’s company from over 25 customers, and Trends, at Greyling’s direction, paid Individual 1 more than $800,000 in commissions.
Greyling assisted Individual 1 to act as an unregistered broker by, among other actions: (i) providing Individual 1 and Individual 1’s customers with positive information about the companies and with “shareholder updates,” which included information about when Individual 1’s customers would purportedly receive their shares, when the companies would purportedly be current on their public financial filings, and when the companies’ securities would purportedly begin active trading on the over-the-counter market; (ii) providing Individual 1 with template stock purchase agreements bearing Greyling’s signature to facilitate customer orders; and (iii) directing commission payments to Individual 1.
Share Sales – Example 1
For example, on or about February 23, 2017, Individual 1 emailed Customer 1, a Massachusetts resident, a stock purchase agreement (“SPA”) offering to have Trends sell the customer 100,000 free-trading (i.e., unrestricted) shares of Alterola for $50,000. Individual 1 wrote, “I really took care of you on this one!!!” Customer 1 signed the agreement and sent it to Individual 1, who forwarded it to Greyling. Customer 1 also wired Trends $50,000. Four days later, on or about February 27, 2017, Individual 1 emailed Customer 1 a second SPA, this time offering to sell 200,000 free-trading Alterola shares for $100,000. Individual 1 stated, “You are about to become a millionaire.”
On or about March 5, 2017, Greyling sent Customer 1 an email about Alterola’s purported “huge market potential” in the “medical cannabis sector.” The email stated that Trends was “RAISING $600 K NOW AT A SEED CAPITAL SHARE PRICE THAT WILL GIVE INVESTORS 10 X INVESTMENT RETURN IN 4 TO 8 WEEKS.” The email further stated that “TRENDS INVESTMENTS WILL BE PROMOTING ALTEROLA ‘ALTA’ AS [THE] NEXT BIG CANNABIS STORY BROUGHT TO WALL STREET BY TRENDS INVESTMENTS INC.”
Trends and Individual 1 were unable to deliver on Trends’ obligations under the SPAs or on their promised investment returns. In reality, the market for ALTA was nearly nonexistent, and fewer than 5,000 shares had traded in the public markets since January 1, 2016. Trends also did not yet own or control any Alterola shares and, as a result, Trends did not provide any Alterola shares to Customer 1 until more than two years after receiving Customer 1’s money. And the shares Trends ultimately did provide were in restricted form, thereby precluding Customer 1 from being able to deposit and sell them in the public market in a timely manner.
Share Sales – Example 2
As another example, on or about March 2, 2017, Individual 1 emailed Customer 2, a New Mexico resident, a SPA, pursuant to which Trends offered to sell the customer 40,000 free-trading shares of Alterola for $20,000. On or about March 6, 2017, Individual 1 sent Customer 2 a follow-up email falsely stating that Alterola “is starting to trade today.” Individual 1 also wrote, “I am taking good care of you” and that the stock “is Trading at 3 dollars right now.”
In reality, no Alterola shares traded that day, and fewer than 3,000 ALTA shares traded during the next two years.
Customer 2 wired Trends $20,000 for the Alterola shares but did not receive any shares from Greyling’s company for more than two years because, as noted above, Trends did not yet own any Alterola shares in March 2017. The Alterola shares Customer 2 ultimately received were then in restricted form.
On or about March 23, 2017, Individual 1 emailed Greyling requesting a payment of $100,000, equal to a 40 percent commission on his sales to Customer 1 and Customer 2. Trends thereafter wired Individual 1 over $100,000 over multiple payments between March and July 2017.
On or about April 6, 2018, Greyling emailed Individual 1 a document titled “Greetings.docx.” Greyling told Individual 1, “This is the only approved greeting email that you are authorized to send out for TKCM.” The greeting email solicited prospective customers to buy shares of Token Communities, which had recently announced a reverse merger and a purported business plan focused on blockchain technology. The greeting email stated that Trends “understand[s] the trust and responsibility that clients place in our hands” and that “[e]verything you need to complete the trade” was attached. The greeting email further stated, “We are expected to start trading on the OTC Market within 30 days.”
Individual 1 thereafter sent the greeting email, or close variants of it, to numerous prospective customers between April and July 2018. Individual 1 told prospective customers, in substance, that Trends expected shares of Token Communities to begin trading within weeks. More than twenty customers subsequently purchased TKCM shares from Trends.
None of the customers, however, were able to deposit and sell their TKCM shares at any point in 2018 or early 2019 because, among other things, Token Communities did not timely file all its financial statements with the SEC, which statements were required to be publicly available before brokers could accept the shares for deposit.
More than one year later, in or about September 2019, Greyling wrote a “shareholder update” for Individual 1’s customers which said, “Corporate counsel is currently preparing all necessary documents to ensure everything is ready for the filing 2 [sic] delinquent audited financial [statements].”
Share Sales – Example 3
On or about April 1, 2019, Individual 1 emailed Customer 3, a Texas resident, a SPA offering to have Trends sell 10,000 shares of Alterola for $5,000. On or about April 17, 2019, Individual 1 texted Customer 3, referring to himself as “your new broker at Trends Investments,” and asking Customer 3 to return the signed agreement.
On or about April 18, 2019, Customer 3 returned a signed agreement for 20,000 Alterola shares and wired $10,000 to Trends. On or about April 26, 2019, at Greyling’s direction, Trends wired $3,000 to Individual 1
On or about May 24, 2019, Individual 1 emailed Greyling that he was going to hit up” several customers, including Customer 3. On or about June 11, 2019, Individual 1 texted Customer 3 a picture of himself, writing, “That’s a picture of me so you know who’s your Wealth Manager.” As a result of a solicitation from Individual 1, Customer 3 subsequently purchased 86,000 shares of TKCM and wired $43,000 to Trends on or about June 17, 2019. On or about June 26, 2019, at Greyling’s direction, Trends wired $9,200 to Individual 1.
Related Litigation
On April 25, 2023, the U.S. District Court for the District of Massachusetts entered final judgments against defendants Trends Investments Inc., Leslie Greyling and Brandon Rossetti. On June 9, 2022, Leslie Greyling (who is the father of Clinton Greyling), Trends and Rossetti were charged by the SEC with engaging in a scheme to defraud investors in private offers and sales of shares of two publicly traded penny stock companies.
According to the SEC’s complaint, filed in June 2022, Leslie Greyling and Rossetti, on behalf of Trends, allegedly lied to investors about whether Trends owned and could deliver to investors the shares it claimed to be selling. The SEC alleged that Leslie Greyling and Rossetti made a variety of misrepresentations to investors in order to keep investor funds, obtain further investments, placate investor concerns, and avoid detection. Rossetti was also charged with acting as an unregistered broker-dealer by soliciting investors, receiving transaction-based compensation from Trends, and claiming to be a “broker” or “wealth manager.”
The SEC’s complaint also alleged that Clinton Greyling participated in the scheme.
Additionally, according to the complaint, Roger Bendelac participated in the scheme by placing manipulative trades in one of the securities Trends was offering and selling to investors. His relative Thomas Capellini was charged with aiding and abetting Bendelac in connection with the manipulative trades.
The judgments, entered on the basis of default, enjoined Trends, Leslie Greyling and Rossetti from violating the anti-fraud provisions of Section 17(a) of the Securities Act of 1933 and Section 10(b) of the Securities Exchange Act of 1934 and Rule 10b-5 thereunder, and imposed penny stock bars. Further, Rossetti was enjoined from acting as an unregistered broker-dealer. The judgments ordered Trends and Leslie Greyling to pay on a joint-and-several basis $1,774,747 in disgorgement and prejudgment interest in the amount of $361,798. Trends was ordered to pay a $2,232,280 penalty and Leslie Greying a $446,458 penalty. Rossetti was ordered to pay $797,750 in disgorgement, prejudgment interest in the amount of $172,676, and a $446,458 penalty.
On September 23, 2022, the court entered a judgment against Clinton Greyling, who without admitting or denying the allegations, consented to the entry of a judgment permanently enjoining him from future violations of Section 17(a) of the Securities Act and Section 10(b) of the Exchange Act and Rule 10b-5 thereunder and imposing a penny stock bar. The judgment left disgorgement, prejudgment interest, and civil penalties to be determined by the court at a later date. Litigation continues with respect to Bendelac and Capellini.
In related news, on March 3, 2023, another Grelying associate, Jeffrey Martin, entered a guilty plea (currently under seal) in his criminal case filed in the United States District Court Eastern District of Pennsylvania (Case #: 2:19-cr-00712-GJP-1). Martin is married to Amy Nankalamu, who links to Lesley Greyling through Bulls Run Investments Limited, an entity that held stock in Alterola Biotech Inc (ABTI) and Virtual Medical International, Inc. (QEBR). Most public disclosures name Amy Nankalamu as the control person of Bulls Run, but one ABTI filing named Leslie Greyling as the control person.
We posted several additional details about Lesley Greyling, Alterola and Token in a previous article published in June 2022, found here.
To speak with a Securities Attorney, please contact Brenda Hamilton at 200 E Palmetto Rd, Suite 103, Boca Raton, Florida, (561) 416-8956, or by email at [email protected]. This securities law blog post is provided as a general informational service to clients and friends of Hamilton & Associates Law Group and should not be construed as and does not constitute legal advice on any specific matter, nor does this message create an attorney-client relationship. Please note that the prior results discussed herein do not guarantee similar outcomes.
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Brenda Hamilton, Securities Attorney
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