High-profile hedge fund director in court

THE director of a Kingscliffbased hedge fund counting Australian sports stars among investors has appeared in court facing criminal charges.

Kenneth Charles Grace fronted Tweed Heads Local Court on Monday on eight counts of engaging in dishonest conduct and one of operating a financial services business without a licence.

The charges, after an Australian Securities and Investments Commission investigation, carry maximum penalties of 10 years’ and two years’ jail respectively.

Grace was the director of Goldsky Global Access Fund between 2014 and 2018 when it raised more than $16m from 50plus investors, including Olympic swimmer Sam Riley, cyclist Robbie McEwen and ex-Brisbane Lions captain Simon Black. Grace, pictured, was granted conditional bail and the matter was adjourned to June 7.

ASIC alleged Grace represented to investors that their money would be invested in a managed fund operated by Goldsky and used for trading.

The corporate regulator alleged Grace did not apply the majority of the investor funds to investment activity and those used for trading did not generate the profits he had promised.

It also alleged Grace used the investor funds for his personal use, including “substantial payments” to family members and the purchase of personal items.

The charges relate to Grace’s time as a director of Goldsky Asset Management Australia Pty Ltd, Goldsky Global Access Fund Pty Ltd and Goldsky Investments Pty Ltd plus US-based Goldsky Asset Management LLC.

In November 2018, ASIC obtained orders to freeze Goldsky associated bank accounts and appoint a receiver.

In January 2019, it obtained further orders to wind up the Goldsky companies. In May 2019, the Supreme Court in Queensland made declarations Goldsky breached the Corporations Act by operating a financial services business without an Australian Financial Services licence.