ASIC Exposes Investment Scam, Court Freezes Assets

Kenneth Charles Grace and his companies managed to make more than $16 million from more than 50 investors.

Following an investigation by the Australian Securities and Investments Commission (ASIC), which has uncovered an alleged scam involving Kenneth Charles Grace and his companies, the Queensland Supreme Court has appointed Anthony Castley of William Buck, a leading firm of Chartered Accountants and advisors, to be the receiver and manager over the assets of Goldsky Global Access Fund Pty Ltd, Grace and associated entities.

The Supreme Court also issued a freezing order, which prohibits the disposal of any property, including money and securities, by Grace and his associated companies – Goldsky Global Access Fund Pty Ltd, Goldsky Asset Management Australia Pty Ltd, and Goldsky Investments Pty Ltd.

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ASIC Investigation

The measures from the Supreme Court follow on from an investigation from ASIC. During its examination, the Australian regulator found that through his companies, Grace operated an unauthorized investment scheme called ‘Goldsky Global Access Fund.’

Through this, ASIC found that he managed to make more than $16 million from more than 50 investors. He used this money for his personal use, which saw him purchase personal items and make large payments to his family members.

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In addition, since around June 5, 2018, Grace was aware that an Australian Financial Services (AFS) license was required to carry out his activities and, according to the statement, he did not obtain this.

This was in part due to the fact Grace, through his US-incorporated company Goldsky Asset Management LCC wanted an exemption from having to get the AFS as he was authorized as an ‘investment advisor’ by the US Securities and Exchange Commission (SEC).

However, ASIC informed the company on June 5 that it was no longer entitled to rely on this relief as it hadn’t complied with the conditions of the relief.

After discovering this misconduct, ASIC began proceedings in the Supreme Court to have a receiver appointed to identify and secure the assets of the alleged scheme. This was largely done for the benefit of the investors and creditors, the statement said.

Castley, who is now the receiver and manager over the assets, is expected to provide a report to the court by November 26, 2018. The matter will also return to the court on November 8, 2018.

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