$16m Goldsky fund ‘Ponzi scheme’ ensnares high-profile sport stars

Some of Queensland’s most high-profile athletes are among more than 50 investors who paid $16 million into an allegedly illegal investment scheme.

SOME of Queensland’s most high-profile athletes have become embroiled in an allegedly illegal investment scheme, with authorities investigating whether a dodgy hedge fund manager used their cash to fund his family’s glamorous lifestyle.

The Australian Securities and Investments Commission has alleged in court that more than 50 investors – including Olympic swimmer Sam Riley, cyclist Robbie McEwen and former Brisbane Lions captain Simon Black – paid $16 million to hedge fund manager Ken Grace’s Goldsky fund.

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ASIC has now frozen the joint bank accounts of Mr Grace and his glamorous wife Jane, in a bid to protect the interests of his investors.

They allege Mr Grace was not licensed to invest, and suspect the Goldsky fund is a Ponzi scheme.

Brisbane Supreme Court was told many investors were high-profile sports stars, their Brisbane-based physiotherapists and acupuncturists, and other friends.

The Kingscliff-based fund’s business development manager is well-known former Brisbane Lions head physiotherapist Victor Popov, and Mr Grace has used famous sports stars, including boxer Jeff Horn, surfer Joel Parkinson and cyclist Stuart O’Grady, to promote his fund in the past.

Former Brisbane Lions captain Simon Black

Olympic swimmer Sam Riley

ASIC has told the court there are dozens of suspicious transactions worth $1 million in Goldsky’s accounts, including $747,646 likely transferred to Mr Grace’s family members, and about $300,000 allegedly spent on jewellery and watches, cosmetic surgery, clothing, restaurant meals and beauty treatments.

The transactions also allegedly include $14,025 spent at a beauty spa in the Cayman Islands – where Mr Grace has a Goldsky fund – in October last year.

Mr Grace has also been sued by US regulator the Securities and Exchange Commission, which has accused him of running a multi-year fraudulent scheme with his New York-based hedge fund, which won an award as hedge fund of the year last year after it claimed it was making returns of 20 per cent.

“The SEC alleges… 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 SEC claim states.

Mr Grace told ASIC he was planning to raise $100 million in the US but it never happened.

Goldsky hedge fund manager Ken Grace with wife Jane

The court heard that he told ASIC investigator David McArthur on October 29 that he had raised $5 million to $6 million from 30 investors in Australia, but he had paid them all back and discontinued funds management in April.

Mr Grace also told Mr McArthur he still had a few investors worth about $1 million, but he was going to pay them all out.

He told Mr McArthur he also does stockmarket trading for up to 30 personal friends in Australia, “which is probably illegal”.

“Friends have given me some money and I’ve bought them some CFDs (Contracts For Difference) and paid the money back,” Mr Grace told investigators.

He denies lying to investors and forging documents to dupe regulators.

Swim coach Scott Volkers

Cyclist Robbie McEwen

Receiver Tony Castley of William Buck has been appointed by the court to identify and secure Goldsky’s assets.

The court heard he would be due to report back by December 10.

Gold Coast real estate agent Tim Fydler, the husband of Sam Riley, confirmed to The Sunday Mail that he and his wife had made separate investments in Goldsky.

Mr Fydler said he was hoping to withdraw his money and was concerned about it.

He said he was aware of the ASIC legal action, and the regulator had told him they were waiting for the outcome of the court case.

Cyclist Robbie McEwen, who was a “Goldsky ambassador” last year, told The Sunday Mail he had invested with Mr Grace “ages ago”.

“It’s no one’s business where I put my money,” he said.