SEC bars Goldsky Asset Management’s owner Kenneth Grace from industry
Mr Grace is barred from association with any broker, dealer, investment adviser, municipal securities dealer, municipal advisor, transfer agent, or nationally recognized statistical rating organization.
About a month after Judge Valerie E. Caproni of the New York Southern District Court signed a final judgment against Australia-based investment adviser Goldsky Asset Management, LLC and its owner, Kenneth Grace, the Securities and Exchange Commission (SEC) announced it is barring Mr Grace from the industry.
The SEC’s announcement states Mr Grace is barred from association with any broker, dealer, investment adviser, municipal securities dealer, municipal advisor, transfer agent, or nationally recognized statistical rating organization, with the right to apply for reentry after two years to the appropriate self-regulatory organization, or if there is none, to the Commission.
Let’s recall that, according to the SEC’s complaint, Goldsky’s Forms ADV filed with the Commission in 2016 and 2017, which Kenneth Grace signed, stated that its hedge fund, Goldsky Global Alpha Fund, LP, had an auditor, a prime broker and custodian, and an administrator. In addition, in its Forms ADV and Forms ADV Part 2A, Goldsky stated that it managed over $100 million in discretionary assets under management. Goldsky’s website also claimed that Goldsky 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.
The SEC alleges that these statements were false and misleading because Goldsky, Grace and Goldsky Fund had no agreements with service providers, Goldsky and Grace did not manage $100 million of assets, and Goldsky Fund did not have any investment returns as it never had any assets.
The New York Court order imposed a civil penalty in the amount of $50,000 on Goldsky Asset Management, whereas Kenneth Grace was ordered to pay a civil penalty in the amount of $25,000.