Hedge fund’s ‘secret weapon’ a lie, court told
A FORMER hedge fund staffer believes a miracle computer program credited for spectacular investment returns for high-profile sports stars never existed, and "it looks like it was just a total lie", a court has heard.
Jack Bow, from Kingscliff, told a four-day liquidators' examination hearing into an alleged Ponzi scheme in the Federal Court yesterday he believed a computer program fund founder Ken Grace had boasted scraped the internet to find the best investment returns, now appeared to not exist.
The examination hearing is probing the now-defunct Goldsky Asset Management Australia Pty Ltd and its associated companies, which went bust with investors claiming up to $25 million is missing.
Those who invested in the fund - which claimed to use a combination of big data and fundamental investing - are former swim coach Scott Volkers who put in $220,000, former AFL player and assistant coach Simon Black ($80,000), current Essendon AFL player Devon Smith ($100,000), former AFL player Clark Keating ($100,000), former Olympic swimmer Sam Riley ($50,000) and her husband Tim Fydler ($100,000), as well as Olympic cyclist Robbie McEwen ($50,000) and Melbourne Storm's director of performance Lachlan Penfold ($127,559).
Surfer Joel Parkinson invested in the fund but got out before it went bust, the court heard.
The fund boasted a spectacular 24 per cent annual investment return to entice investors, the court heard.
Giving evidence yesterday, university economics dropout and former car dealer Mr Grace denied he had stolen from investors.
"What we think is you have stolen the money from investors," barrister Liam Copley, for liquidator Chris Baskerville of Jirsch Sutherland, asked Mr Grace.
"No, because that did not happen," Mr Grace replied, adding he believed the money was stolen or siphoned out of the fund via "cybercrime".
"You were just using the investors funds as your own?" Mr Copley suggested.
"No I was using them because I didn't get a wage," Mr Grace responded, adding he was entitled to a six-figure wage as a fund-manager.
Mr Copley said Mr Grace failed to tell investors that he would give $747,000 of their money to his wife Jane and his children over 18 months, spend another $106,000 of company money on jewellery and accessories, and $36,000 on restaurants among other sums.
"Did you tell (investors) 'Give me money, I'm going to buy a Rolex?'" Mr Copley asked.
Mr Copley quizzed Mr Grace about how he had admitted to running a Ponzi scheme to investigators from the corporate regulator in 2018.
Yesterday in court Mr Grace denied running a Ponzi scheme.
His wife Jane also refuted the suggestion, and blamed hackers possibly linked to a drug dealer for the missing money.
She suggested police had warned her a hit had been put out on her husband.
She said she had believed money she spent on Botox treatments for her fibromyalgia, her daughter's breast implants and other expenses, had been family money and was not company money.
Carrying a Prada handbag at court, she said she was now unemployed and broke, awaiting Centrelink payments, and was paying her $850 a week rent for an Isle of Capri home by selling furniture on Gumtree and with loans from her family.
The hearing continues today with further examination of Mr Grace.