On 12 April 2021, Kenneth Charles Grace appeared in the Tweed Heads Local Court charged with eight counts of engaging in dishonest conduct and one count of operating a financial services business without a licence.

At the relevant time, Mr Grace was the Director of Goldsky Asset Management Australia Pty Ltd, Goldsky Global Access Fund Pty Ltd and Goldsky Investments Pty Ltd (Goldsky) as well as a US-based company, Goldsky Asset Management LLC.

Mr Grace based his business in Kingscliff NSW and raised monies from Australian investors through Goldsky and Goldsky Asset Management LLC. Investors included those from Mr Grace’s local area as well as high-profile Australian sportspeople.

ASIC alleges between November 2014 and October 2018, Mr Grace represented to investors that their money would be invested in a managed fund which was operated by Goldsky and used for trading.

ASIC alleges Mr Grace did not apply the majority of investor monies to investment activity and those that were used for trading did not generate the profits that he represented to investors.

ASIC further alleges that funds were used to pay returns and redemptions to existing investors and were also used to pay for the lifestyle expenses of Mr Grace and his immediate family.

The criminal charges allege Mr Grace contravened the Corporations Act by engaging in dishonest conduct and operating a financial services business without a licence. At the relevant time, these charges carried maximum penalties of 10 years and two years imprisonment respectively.

Mr Grace was granted conditional bail and the matter was adjourned to 7 June 2021.

The Commonwealth Director of Public Prosecutions is prosecuting the matter after a referral from ASIC.

Background

In November 2018, ASIC successfully obtained orders to freeze Goldsky associated bank accounts and appoint a receiver and in January 2019, ASIC obtained further orders to wind up the Goldsky companies (18-333MR).

In May 2019, the Queensland Supreme Court made declarations that Goldsky had breached the Corporations Act by operating a financial services business without an Australian Financial Services licence (19-109MR).

Mr Chris Baskerville from Jirsch Sutherland is the appointed liquidator of the Goldsky Australian companies. Investors and creditors should direct their enquiries to: admin@jirschsutherland.com.au.

Goldsky Asset Management LLC commenced operating a financial services business in Australia in March 2017. Goldsky Asset Management LLC purported to rely on an exemption to hold an Australian Financial Services licence due to an ‘investment advisor’ authority which it had obtained from the United States Security and Exchange Commission (SEC).

On 2 January 2019, the SEC obtained judgment against Goldsky Asset Management LLC and Kenneth Grace for making false and misleading statements about its business. Goldsky Asset Management LLC and Mr Grace were ordered to pay penalties totaling USD$75,000. See SEC Litigation Release No. 24418.

ASIC acknowledges the assistance of the SEC in its investigation.

Editor's note 1:

On 7 June 2021, the matter was adjourned to 26 July 2021.

Editor's note 2:

On 26 July 2021, the matter was adjourned until 13 September 2021.

Editor's note 3:

On 13 September 2021, the matter was adjourned to 15 October 2021 at Tweed Heads Local Court for mention.

Editor's note 4:

On 15 October, 2021, the matter was adjourned to 10 December 2021 at Tweed Heads Local Court for mention.

Editor's note 5:

On 10 December 2021, the matter was adjourned to 18 January 2022.

Editor's note 6:

On 18 January 2022, the matter was adjourned to 18 February 2022.

Editor's note 7:

On 18 February 2022, the matter was adjourned until 13 May 2022.

Editor's note 8:

On 13 May 2022, the court ordered that Mr Grace be committed to trial at Lismore District Court. The matter was adjourned until 20 June 2022 for mention.

Editor's note 9: 

On 20 June 2022, the case was mentioned in Lismore District Court. Mr Grace appeared in person and plead not guilty to all nine counts.

The matter has now been scheduled for mention on 15 July 2022 at Downing Centre District Court.

Editor's note 10:

Following a mention on 15 June 2022 in the Sydney District Court, the matter has now been listed for a six week trial commencing on Monday, 29 May 2023.

Editor's note 11:

On 14 April 2023, Mr Grace appeared at the Sydney District Court where he was arraigned and entered pleas of guilty to five counts of s1041G of the Corporations Act 2001. Mr Grace will be sentenced on a date to be set. The case has been set for a further mention on 26 May 2023.

Editor's note 12:

On 26 May 2023, the matter was adjourned for a further mention on 9 June 2023.

Editor's note 13:

On 9 June 2023, the matter was set down for a sentencing hearing on 13 and 14 November 2023.

Editor's note 14:

On 6 November 2023, the sentencing hearing was adjourned to 18-19 January 2024. 

Editor's note 15: 

ASIC has been informed by the Commonwealth Director of Public Prosecutions and NSW Police that Mr Grace died on Thursday, 18 January 2024.  

Once formal documentation regarding Mr Grace’s death is finalised, it is intended that the prosecution proceedings will be formally withdrawn and discontinued.

Editor's note 16:

We have received the formal court order that was made on 14 June 2024 for no further proceedings as the offender is deceased.