- ASIC has obtained a court order to freeze the assets of Goldsky Asset Management and its founder, Ken Grace.
- The regulator alleges that Grace operated an unlicensed financial services company which raised $16 million from over 50 investors.
- ASIC then alleged that investor funds were used for Grace’s personal use, including “including substantial payments to family members and the purchase of personal items”.
Corporate regulator ASIC has taken action against an Australian investment company, alleging the founders took money from investors and used it for personal use.
In a statement today, ASIC said the Queensland Supreme Court has appointed a receiver to manage the assets of Goldsky Asset Management Pty Ltd and its founder Ken Grace.
The regulator has also successfully applied for a court order to freeze assets held by Grace, Goldsky Asset Management and two other entities.
It follows an investigation by ASIC, after which the regulator alleged that Grace had been running a financial services business without holding an Australian Financial Services (AFS) licence.
Grace was also alleged to have raised $16 million from over 50 investors through Goldsky Asset Management, which he then used “for his own personal use, including substantial payments to family members and the purchase of personal items”.
Grace established his Australian operations via a US-based entity called Goldsky Asset Management LCC.
ASIC said the Australian-based Goldsky Asset Management Pty Ltd was set up March 2017, operating as an “agent” of the US company.
On those grounds, it claimed exemption from holding an AFS licence under rules which grant relief to some companies if they already hold an existing licence offshore.
However, in June ASIC advised the American entity that “it was no longer entitled to rely on the relief as it had not complied with the conditions of the relief”.
In late September, the US Securities & Exchange Commission (SEC) filed a lawsuit against Goldsky Asset Management LCC.
The SEC alleged the company had engaged in fraudulent activity for multiple years, and didn’t manage the funds it claimed to manage.
Anthony Castley of William Buck, the receiver and manager appointed by the Court, will present his report on November 26.
In conducting its investigation, ASIC acknowledged the assistance of US regulators.
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