SEC Obtains Final Judgments Against Australia-Based Investment Adviser
Litigation Release No. 24418 / March 6, 2019
Securities and Exchange Commission v. Goldsky Asset Management, LLC and Kenneth Grace, No. 18-civ-8870 (VEC) (S.D.N.Y.)(filed September 27, 2018)
On January 2, 2019, a federal district court entered final consent judgments against an Australia-based investment adviser, Goldsky Asset Management, LLC, and its owner, Kenneth Grace, for making false and misleading statements about its business in filings with the Commission and on its website.
The SEC's complaint, filed on September 27, 2018 in the Southern District of New York, alleged that Goldsky's Forms ADV for 2016 and 2017, which Grace signed, falsely stated that Goldsky's hedge fund, Goldsky Global Alpha Fund, LP, had an auditor, a prime broker and custodian, and an administrator. The complaint further alleged that, in its Forms ADV and ADV Part 2A, Goldsky stated that it managed over $100 million in discretionary assets under management, when it in fact had no assets. According to the complaint, Goldsky's website falsely claimed that Goldsky Global Alpha Fund earned 19.45% compounded annual returns since inception, 70.33% compounded monthly returns since inception, and 25.30% returns for the year ended September 30, 2017.
Without admitting or denying the allegations in the company, Goldsky and Grace agreed to the entry of final judgments enjoining them from violating the antifraud provisions of Sections 206(4) and 207 of the Investment Advisers Act of 1940 and Rule 206(4)-8 thereunder, and ordering Goldsky and Grace to pay civil monetary penalties of $50,000 and $25,000, respectively.
The SEC appreciates the assistance of the Australian Securities and Investments Commission in this matter.