SEC Obtains Final Judgments Against Investment Adviser, Goldsky Asset Management
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 Asset Management’s Forms ADV for 2016 and 2017, which Grace signed, falsely stated that Goldsky Asset Management’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 Asset Management stated that it managed over $100 million in discretionary assets under management, when it in fact had no assets. According to the complaint, Goldsky Asset Management’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 Asset Management and Kenneth 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 Asset Management and Kenneth Grace to pay civil monetary penalties of $50,000 and $25,000, respectively.
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