Prominent Sydney venture capitalist Grant McCarthy helped raise funds for a company run by an Australian banker accused by authorities in the US of defrauding wealthy investors and fleeing to Bali.
The Securities and Exchange Commission is pursing Andrew Waters, a former investment banker, accusing him of reeling in wealthy investors and selling them “worthless” shares in ECom Products Group Corporation.
Tidal Ventures partner Grant McCarthy was involved in alleged fraudster Andrew Waters’ company Ecom. AFR
Mr Waters, 59, and his wife Helen, 47, managed to convince well-heeled residents of Aspen and Montecito to invest in the company – known as EPGC – according to the regulator’s filings with a California court.
Mr McCarthy invested in EPGC and sat on its board, where he assisted with fundraising. He is a founder of Tidal Ventures, which has investments in Shippit, which has been valued at $300 million, FrankieOne and New Zealand’s PredictHQ, with valuations of more than $200 million.
Mr McCarthy, who said he had known Mr Waters for a decade, told AFR Weekend that he provided “executive support” on M&A and strategy and assisted a process that “enabled the business to raise new equity by issuing new shares in the company”.
“This was on behalf of EPGC itself, which has no relation to Waters selling his personal shares in the company to individual investors as claimed by the SEC, which I was wholly unaware of,” he added.
Mr McCarthy remained on the board when EPGC unsuccessfully sued a former employee, Michael Cox, who was warning others of financial irregularities the firm. Mr Cox alleged the firm was an “elaborate front” that Mr Waters used for his personal enrichment. The lawsuit brought against him collapsed after Mr
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