Goldsky’s missing millions Judge rules companies unlicensed
MILLIONS of dollars were moved from company bank accounts of a failed Kingscliff hedge fund into a personal account of the director and his wife, court documents have revealed.
Supreme Court Judge Peter Flanagan yesterday ruled three companies linked to Goldsky Global had broken the law by running a financial services business while unlicensed.
Documents lodged in the case said ASIC investigators discovered about $16 million from 56 investors had gone into Goldsky’s three bank accounts and been moved around between them.
An investigator found about $1 million in “suspicious transactions” from the Goldsky accounts including payments to family members, cosmetic treatments, jewellery and accessories, restaurant bills and clothing purchases.
The judgement said “large sums of money” were transferred between three Goldsky accounts and a personal account of director Kenneth Grace and wife Jane, including one transfer of $5.53 million from the company account to the personal account.
The court had earlier frozen the assets of Mr Grace and his wife Jane and the companies were placed into liquidation in December.
There is shortfall of $12.55 million in investor funds, the judgement said, and ASIC also identified “a number of transactions where investor funds appear to have been used to purchase motor vehicles or real property”.
The fund and its director Kenneth Charles Grace are battling civil fraud charges in the United States and is under investigation here with the regulator alleging it has operated as a Ponzi scheme.
Investors have included Olympic gold medallists and high-profile business people.
The United States Securities and Exchange Commission (SEC) filed a civil suit in the United States District Court, Southern District of New York against Goldsky Asset Management LLC and Mr Grace on September 27. a
The SEC’s complaint alleges Goldsky’s claims about managing $100 million of assets and about its returns were “false and misleading”.
Goldsky’s US company was in January ordered to pay US$50,000 civil penalty, while Mr Grace was ordered to pay US$25,000 “without admitting or denying the allegations”.
Goldsky recruited highprofile sport stars including cyclists Robbie McEwen and Stuart McGrady, along with world champion surfer Joel Parkinson and boxer Jeff Horn to spruik a homeless charity last year.
Judge Flanagan ordered the three Goldsky companies found to have been operating unlicensed pay ASIC’s court costs. A spokesman for ASIC said investigations were ongoing into Goldsky.