20(d)(1) and 22(a) of the Securities Act of 1933 (“Securities Act”), 15 U.S.C. §§

 
COMPLAINT 
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DONALD W. SEARLES (Cal. Bar No. 135705) 
Email:  [email protected]
 
ALEC JOHNSON (Cal. Bar No. 270960) 
Email:  [email protected]
 
 
 
Attorneys for Plaintiff 
Securities and Exchange Commission 
Michele Wein Layne, Regional Director 
John W. Berry, Associate Regional Director 
Amy J. Longo, Regional Trial Counsel 
444 S. Flower Street, Suite 900 
Los Angeles, California 90071 
Telephone: (323) 965-3998 
Facsimile: (213) 443-1904 
UNITED STATES DISTRICT COURT 
CENTRAL DISTRICT OF CALIFORNIA 
 
SECURITIES AND EXCHANGE 
COMMISSION, 
Plaintiff, 
 
vs. 
KEENAN GRACEY, 
Defendant. 
 
 Case No. 
 
 
COMPLAINT 
 
 
(FILED UNDER SEAL) 
 
 
 
 
Plaintiff Securities and Exchange Commission (“SEC”) alleges: 
JURISDICTION AND VENUE 
1. The Court has jurisdiction over this action pursuant to Sections 20(b), 
20(d)(1) and 22(a) of the Securities Act of 1933 (“Securities Act”), 15 U.S.C. §§ 
77t(b), 77t(d)(1) & 77v(a), and Sections 21(d)(1), 21(d)(3)(A), 21(e) and 27(a) of the 
Securities Exchange Act of 1934 (“Exchange Act”), 15 U.S.C. §§ 78u(d)(1), 
78u(d)(3)(A), 78u(e) & 78aa(a).  Defendant Keenan Gracey (“Gracey” or 
“Defendant”) has, directly or indirectly, made use of the means or instrumentalities of 

 
COMPLAINT 
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interstate commerce, of the mails, or of the facilities of a national securities exchange 
in connection with the transactions, acts, practices and courses of business alleged in 
this complaint.  
2. Venue is proper in this district pursuant to Section 22(a) of the Securities 
Act, 15 U.S.C. § 77v(a), and Section 27(a) of the Exchange Act, 15 U.S.C. § 78aa(a), 
because certain of the transactions, acts, practices and courses of conduct constituting 
violations of the federal securities laws occurred within this district.   
SUMMARY 
3. The SEC brings this emergency action to halt an ongoing investment 
fraud by defendant Keenan Gracey.  Gracey takes investors’ money promising to 
invest in “pre-IPO” shares with a 6,000% return.  In reality, these shares do not even 
exist—there is no planned IPO.  Instead, Gracey just steals the money.  So far, he has 
taken at least $400,000 from known investors, has received over $2 million through 
approximately 107 wire transfers into his various bank accounts since 2016, and 
continues to solicit new investors.     
4. On October 11, 2017, DXC Technology Company (“DXC”), announced 
a planned merger of its public sector business division with two private companies, 
KeyPoint Government Solutions (“KeyPoint”) and Vencore, Inc. (“Vencore”), which 
ar  e both owned by private equity funds managed by Veritas Capital Fund 
Management, LLC (“Veritas”).  The merger was initially expected to close in March 
2018, and is presently expected to close in May 2018. 
5. Claiming that he comes from a wealthy family background, Gracey 
falsely offers unsuspecting investors “pre-IPO shares”   of the planned new company, 
even having them sign a “share purchase agreement.”  However, neither the IPO nor 
the shares are real.  DXC is not planning a public offering, and until the merger is 
finalized, no shares in the new company will be distributed.  Moreover, Gracey 
neither owns, nor has access to, any shares, nor has he any relationship with DXC, 
Veritas or its investment funds, nor with Vencore or KeyPoint.   

 
COMPLAINT 
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6. By engaging in this conduct, Gracey has violated, and continues to 
violate, the antifraud provisions of Sections 17(a)(1), (2) & (3) of the Securities Act, 
15 U.S.C. § 77q(a), and Section 10(b) of the Exchange Act, 15 U.S.C. § 78j(b), and 
Rules 10b-5(a), (b) and (c) thereunder, 17 C.F.R. 240.10b-5(a),(b) & (c).   
DEFENDANT 
7. Keenan Gracey, age 27, is a resident of Clyde Hill, Washington.  Gracey 
is not registered with the Commission in any capacity.   
RELATED ENTITIES 
8. DXC is    a   technology services company formed in 2017 from the merger 
of Computer Sciences Corporation and the Enterprise Services division of Hewlett 
Packard.  DXC is incorporated in Nevada, with its principal place of business in 
Tysons, Virginia.  DXC has been an SEC reporting company since 2017, and is 
quoted on the NYSE under the ticker symbol “DXC.” 
9. Veritas is a registered investment adviser and manages four private 
equity funds.  Veritas is a Delaware corporation founded in 2005, with its principal 
place of business in New York, New York.  It has been registered as an investment 
adviser with the SEC since 2012.   
10. KeyPoint is a private management consulting company formed in 2011.  
KeyPoint has its principal place of business in Loveland, Colorado.  KeyPoint is 
owned and controlled by funds under the management of Veritas. 
11. Vencore is    a private government contractor, incorporated in Delaware in 
2010, with its principal place of business in Chantilly, Virginia.  Vencore is owned 
and controlled by funds under the management of Veritas. 
FACTUAL ALLEGATIONS 
A. Background: Gracey’s Elaborate Façade of Wealth and Success  
12. As part of an elaborate scheme to cause investors to part with their 
money, Gracey represents to investors , orally and in solicitation emails, that he comes 
from an extremely wealthy family, one with “an enormous array of military and 

 
COMPLAINT 
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governments contracts at our disposal to bolster the companies we buy.” 
13. According to numerous investors, Gracey promotes himself by 
showcasing an extravagant lifestyle, claiming to own luxury homes in Beverly Hills 
and Seattle and a fleet of luxury automobiles, including Bentleys and Ferraris.  
14. As part of his appearance of wealth, Gracey provided one or more 
investors with a heavily redacted bank statement, purporting to show that Gracey had 
immediate access to over $700 million. 
15. Gracey uses the illusion of wealth and privilege to convince investors 
that he has special access to exclusive financial transactions, claiming “multi 
generational success [that his family has] garnered through successful IPO’s and 
bringing private companies public.”   
16. In fact, Gracey’s lavish lifestyle is an elaborate façade designed to 
falsely portray himself as an international man of finance with family ties to various 
governments and government contractors, to convince investors that he has unique 
access to lucrative financial deals.   
17. Gracey does not own either of the real properties that he claims to own.     
18. Gracey rents the luxury automobiles that he claims to own. 
19. Gracey has no connection with any of the companies in the merger that 
he claims to be involved with. 
20. Given the fact that Gracey is behind in rent on the properties he claims 
to own, and that his luxury automobiles have been repossessed, on information and 
belief, Gracey does not have immediate access to $700 million. 
21. Gracey’s false portrayal of the impression that his background and 
lifestyle provided him access to financial opportunities were material to investors’ 
decisions to entrust their money to him. 
B. The Pre-IPO Investment Scheme 
22. On October 11, 2017, DXC publicly announced that it would spin off its 
public sector business division and merge it with Vencore and KeyPoint to form a 

 
COMPLAINT 
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new publicly traded company. 
23. As noted in public announcements about the merger, private equity 
funds managed by Veritas, which own and control both Vencore and KeyPoint,will 
receive approximately 14% of the shares in the new company.  The remaining shares 
in the new company, which will be called Perspecta, Inc. (“Perspecta”), will be 
distributed to DXC’s shareholders.  
24. No public offering of Perspecta shares has been announced, and contrary 
to Gracey’s representations to investors, no public offering is planned.   
25. The merger, originally expected to be finalized by March 31, 2018, is 
now expected to close in May 2018.  
26. Beginning no later than October 15, 2017, and continuing through the 
present, Gracey has used public information about the deal to lure investors into 
believing he owns or has access to pre-IPO shares in Perspecta.   
27. Gracey communicates with investors through in-person meetings, by 
phone, by email, and by texts.  
28. For example, Gracey showed several investors a DXC-created 
presentation (which is publicly available on DXC’s website) that highlighted the 
benefits of the merger and detailed the parties involved.   
29. Gracey claimed to several investors orally and in emails that his 
grandfather had a controlling interest in several investment firms, including Veritas.   
30. Based on his family’s alleged connection with Veritas, Gracey 
represented to investors orally and in emails that he made a personal investment of 
$150 million in the pre-IPO stock, and further claimed to have purchased another 
$100 million of stock on margin to sell to other investors “so as to earn [Gracey’s] 
$24 per share on the secondaries [sic] insurance market.”    
31. Gracey offered to sell portions of this additional $100 million stake in 
pre-IPO stock to investors.   
32. Several investors received a “Share Purchase Agreement” in which 

 
COMPLAINT 
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Gracey represents that he “is the owner of record of an aggregate of Series A shares 
in a private company with NDA Chartered name NewCorp, which is the product of 
the merger of parts of DXC, Vencore, Keypoint, and any other businesses involved 
(the “Corporation”) that intends to go public with an IPO, in 2018, through an 
accredited investment consortium.”   
33. In the “Share Purchase Agreement,” Gracey further represents that he is 
“the owner in clear title of the Shares and the Shares are free of any lien, 
encumbrance, security interests, charges, mortgages, pledges, or adverse claim or 
other restriction that would prevent the transfer of clear title to the Purchaser.”  
34. Gracey agreed to sell these purported pre-IPO shares to investors for $1 
a share, in the Share Purchase Agreement.  
35. Gracey told investors orally and in emails that they would recover fifty 
to sixty times their investment after the newly formed company went public.   
36. Gracey also offered a range of incentives for investors to bring in other 
investors, including offering to pay 10% of the profits he made on the “secondaries 
[sic] market” from these referrals. 
37. When he is taking investors’ money, Gracey knows, or is reckless or 
negligent in not knowing, that he does not have any access to or ownership in the 
shares he promises to provide the investors in exchange, and that he does not have the 
wealth and connections he claims to have in luring these investors.   
38. Reasonable investors would have found it important to know that the 
securities at issue did not exist and that Gracey would keep the money they gave him 
without every delivering the promised “pre-IPO” shares.  Reasonable investors would 
also have wanted to know that Gracey’s façade of wealth and connections was a ruse.  
C. Gracey’s Representations Are False 
39. Gracey knows, or is reckless or negligent in not knowing, that his 
representations about the proposed IPO and his alleged financial interest in the new 
company to be formed are false.   

 
COMPLAINT 
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40. DXC has no intention, publicly stated or otherwise, to make a public 
offering of shares in connection with the merger and formation of Perspecta.   
41. Rather, shares in Perspecta will be distributed to DXC shareholders and 
the Veritas funds with no separate offering.   
42. Gracey knows, or is reckless or negligent in not knowing, that no Series 
A shares of Perspecta are authorized by Perspecta’s articles of incorporation or 
bylaws, no Series A shares have been issued, and no shares in Perspecta can be 
acquired or distributed before the merger is finalized, which has not yet occurred.  
43. Accordingly, Gracey knows, or is reckless or negligent in not knowing, 
that his claims that he already owns shares in the new company are false. 
44. In addition, and Gracey knows, or is reckless or negligent in not 
knowing, that he holds no financial interest in KeyPoint, Vencore, or in the Veritas 
funds, which own and control those companies.   
45. The majority of Veritas’s clients are institutional investors, such as 
pension funds, and there are only three individual clients, none of whom have a 
connection to Gracey or his family. 
46. Gracey’s misrepresentations to investors were material to their decision 
to sign share purchase agreements and to give money to Gracey to purchase the pre-
IPO shares that Gracey offered and purported to own.  Reasonable investors would 
have found it important to know that the securities at issue did not exist and that the 
money paid for those securities would be misappropriated.  
D. Recent Events and Gracey’s Lulling Activities 
47. Numerous investors grew suspicious of Gracey after he indicated the 
purported IPO was “delayed,” and some investors learned that Gracey did not own 
the real estate or expensive cars that he led them to believe he owned.  
48. Several investors have demanded the return of their monies, but Gracey 
has given them an array of excuses, including falsely claiming that that the SEC has 
frozen his accounts pending completion of the merger.  

 
COMPLAINT 
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49. A group of Washington-based investors flew to Los Angeles in March 
2018 and confronted Gracey at his (rented) Beverly Hills estate.  At that time, Gracey 
agreed to refund $50,000 within a week, and to provide further details about the pre-
IPO investment. 
50.  Gracey neither refunded investors’ monies nor provided further details 
about the investment. 
51.  Instead, Gracey vacated his rented Beverly Hill estate and went to the  
state of Washington, still owing over $50,000 in unpaid rent. 
52. Nonetheless, Gracey continues to lull investors into believing their pre-
IOP investment is safe and on track. 
53.  As recently as April 30, Gracey distributed additional publicly available 
information concerning the formation of Perspecta to investors, breathlessly stating in 
at least one text message, “Trust me tho..(sic) that document right there is exactly 
what the [expletive] we all been waiting for. ”   
54. Gracey continues to solicit new investors in his pre-IPO scheme, and 
unless temporarily and permanently enjoined, will continue to do so.   
55. In carrying out his offering fraud, Gracey has used, and continues to use, 
various means and instruments of interstate commerce, including, but not limited to, 
interstate telephonic communications, email communications over the Internet, and 
interstate wire transfers of investor monies.  
FIRST CLAIM FOR RELIEF 
Fraud in the Offer or Sale of Securities 
Violations of Section 17(a)(1) and (3) of the Securities Act 
56. The SEC realleges and incorporates by reference paragraphs 1 through 
59 above. 
57. As set forth above, Gracey’s elaborate façade of wealth and success, his 
use of publicly available information concerning the merger and creation of 
Perspecta, and his claim that he has unique access to pre-IPO shares, is just an 

 
COMPLAINT 
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elaborate scheme to convert investors’ monies.  
58. By engaging in the conduct described above, Gracey, directly or 
indirectly, in the offer or sale of securities, and by the use of means or instruments of 
transportation or communication in interstate commerce or by use of the mails 
directly or indirectly, knowingly or recklessly employed devices, schemes, or 
artifices to defraud, and knowingly, recklessly or negligently engaged in transactions, 
practices, or courses of business which operated or would operate as a fraud or deceit 
upon the purchaser. 
59. By engaging in the conduct described above, Gracey violated, and unless 
restrained and enjoined will continue to violate, Section 17(a)(1) and 17(a)(3) of the 
Securities Act, 15 U.S.C. § 77q(a)(1) & (3).  
SECOND CLAIM FOR RELIEF 
Fraud in the Offer or Sale of Securities 
Violations of Sections 17(a)(2) of the Securities Act 
60. The SEC realleges and incorporates by reference paragraphs 1 through 
59 above. 
61. As set forth above, Gracey’s representations to investors, including, but 
not limited to, those made in the Share Purchase Agreement, in which he claimed to 
own pre-IPO shares, are demonstrably false. 
62. Gracey obtained money from investors by means of his material 
misstatements.  
63. By engaging in the conduct described above, Gracey, directly or 
indirectly, in the offer or sale of securities, and by the use of means or instruments of 
transportation or communication in interstate commerce or by use of the mails 
directly or indirectly, knowingly, recklessly or negligently, obtained money or 
property by means of untrue statements of material fact, any by omissions to state a 
material fact necessary in order to make the statements made, in light of the 
circumstances under which they were, not misleading.  

 
COMPLAINT 
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64. By engaging in the conduct described above, Gracey violated, and unless 
restrained and enjoined will continue to violate, Sections 17(a)(2) of the Securities 
Act, 15 U.S.C. § 77q(a)(2). 
THIRD CLAIM FOR RELIEF 
Fraud in the Connection with the Purchase and Sale of Securities 
Violations of Section 10(b) of the Exchange Act and Rule 10b-5 (a) and (c) 
65. The SEC realleges and incorporates by reference paragraphs 1 through 
59 above. 
66. As set forth above, Gracey’s elaborate façade of wealth and success, his 
use of publicly available information concerning the merger and creation of 
Perspecta, and his claim that he has unique access to pre-IPO shares, is just an 
elaborate scheme to convert investors’ monies.  
67. By engaging in the conduct described above, Gracey, directly or 
indirectly, in connection with the purchase or sale of a security, by the use of means 
or instrumentalities of interstate commerce, of the mails, or of the facilities of a 
national securities exchange, knowingly or recklessly employed devices, schemes, or 
artifices to defraud, and engaged in acts, practices, or courses of business which 
operated or would operate as a fraud or deceit upon other persons. 
68. By engaging in the conduct described above, Gracey violated, and unless 
restrained and enjoined will continue to violate, Section 10(b) of the Exchange Act, 
15 U.S.C. § 78j(b), and Rules 10b-5(a) and (c) thereunder, 17 C.F.R. §§ 240.10b-5(a) 
& (c).  
FOURTH CLAIM FOR RELIEF 
Fraud in Connection with the Purchase or Sale of Securities 
Violations of Section 10(b) of the Exchange Act and Rule 10b-5(b) 
69. The SEC realleges and incorporates by reference paragraphs 1 through 
59 above. 
70. As set forth above, Gracey made material representations to investors, 

 
COMPLAINT 
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including, but not limited to those made in the Share Purchase Agreement, in which 
he claimed to own pre-IPO shares.  
71. By engaging in the conduct described above, Gracey, directly or 
indirectly, in connection with the purchase or sale of a security, and by the use of 
means or instrumentalities of interstate commerce, of the mails, or of the facilities of 
a national securities exchange, knowingly or recklessly, made untrue statements of a 
material fact or omitted to state a material fact necessary in order to make the 
statements made, in the light of the circumstances under which they were made, not 
misleading.  
72. By engaging in the conduct described above, Gracey violated, and unless 
restrained and enjoined will continue to violate, Section 10(b) of the Exchange Act, 
15 U.S.C. § 78j(b), and Rules 10b-5(b) thereunder, 17 C.F.R. §§ 240.10b-5(b).   
PRAYER FOR RELIEF 
WHEREFORE, the SEC respectfully requests that the Court: 
I. 
Issue findings of fact and conclusions of law that Defendant committed the 
alleged violations. 
II. 
Issue, in a form consistent with Fed. R. Civ. P. 65, a temporary restraining 
order and an order to show cause why a preliminary injunction should not be entered, 
temporarily and preliminarily enjoining Defendant, and his officers, agents, servants, 
employees and attorneys, and those persons in active concert or participation with 
any of them, who receive actual notice of the judgment by personal service or 
otherwise, and each of them, from violating Section 17(a)(1), (2) and (3) of the 
Securities Act [15 U.S.C. §77q(a)(1), (2) & (3)], and Section 10(b) of the Exchange 
Act [15 U.S.C. §§ 78j(b)] and Rule 10b-5(a), (b) and (c) thereunder [17 C.F.R. § 
240.10b-5(a), (b) & (c)]. 

 
COMPLAINT 
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III. 
Issue, in a form consistent with Fed. R. Civ. P. 65, a temporary restraining 
order and an order to show cause why a preliminary injunction should not be entered, 
freezing the funds and assets of Defendant; prohibiting Defendant from destroying 
documents; ordering an accounting by Defendant; and ordering expedited discovery. 
IV. 
Issue a   judgment, in a form consistent with Rule 65(d) of the Federal Rules of 
Civil Procedure, permanently enjoining Defendant, and his officers, agents, servants, 
employees and attorneys, and those persons in active concert or participation with 
any of them, who receive actual notice of the judgment by personal service or 
otherwise, and each of them, from violating Section 17(a)(1), (2) and (3) of the 
Securities Act [15 U.S.C. §77q(a)(1), (2) & (3)], and Section 10(b) of the Exchange 
Act [15 U.S.C. §§ 78j(b)] and Rule 10b-5(a), (b) and (c) thereunder [17 C.F.R. § 
240.10b-5(a), (b) & (c)]. 
V. 
Issue a judgment, in a form consistent with Rule 65(d) of the Federal Rules of 
Civil Procedure, permanently en  joining Defendant from, directly or indirectly, 
participating in the issuance, purchase, offer, or sale of any securities, provided, 
however, that such injunction shall not prevent Defendant from purchasing or selling 
securities listed on a national securities exchange for his own personal account. 
VI. 
Order Defendant to disgorge all funds received from his illegal conduct, 
together with prejudgment interest thereon. 
VII. 
Order Defendant to pay civil penalties under Section 20(d) of the Securities 
Act [15 U.S.C. § 77t(d)] and Section 21(d)(3) of the Exchange Act [15 U.S.C. § 
78u(d)(3)]. 

 
COMPLAINT 
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VIII. 
Retain jurisdiction of this action in accordance with the principles of equity and 
the Federal Rules of Civil Procedure in order to implement and carry out the terms of 
all orders and decrees that may be entered, or to entertain any suitable application or 
motion for additional relief within the jurisdiction of this Court. 
IX. 
Grant such other and further relief as this Court may determine to be just and 
necessary. 
Dated:  May 9, 2018  
 /s/ Alec Johnson   
Alec Johnson 
Donald W. Searles 
Attorneys for Plaintiff 
Securities and Exchange Commission 
 
 
 

COMPLAINT 1  
 

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DONALD W. SEARLES (Cal. Bar No. 135705) 
Email:  [email protected] 
ALEC JOHNSON (Cal. Bar No. 270960) 
Email:  [email protected] 
 
 
Attorneys for Plaintiff 
Securities and Exchange Commission 
Michele Wein Layne, Regional Director 
John W. Berry, Associate Regional Director 
Amy J. Longo, Regional Trial Counsel 
444 S. Flower Street, Suite 900 
Los Angeles, California 90071 
Telephone: (323) 965-3998 
Facsimile: (213) 443-1904 

UNITED STATES DISTRICT COURT 

CENTRAL DISTRICT OF CALIFORNIA 

 

SECURITIES AND EXCHANGE 
COMMISSION, 

Plaintiff, 
 

vs. 

KEENAN GRACEY, 

Defendant. 
 

 Case No. 
 
 
COMPLAINT 
 
 
(FILED UNDER SEAL) 
 

 
 
 

Plaintiff Securities and Exchange Commission (“SEC”) alleges: 

JURISDICTION AND VENUE 

1. The Court has jurisdiction over this action pursuant to Sections 20(b), 

20(d)(1) and 22(a) of the Securities Act of 1933 (“Securities Act”), 15 U.S.C. §§ 

77t(b), 77t(d)(1) & 77v(a), and Sections 21(d)(1), 21(d)(3)(A), 21(e) and 27(a) of the 

Securities Exchange Act of 1934 (“Exchange Act”), 15 U.S.C. §§ 78u(d)(1), 

78u(d)(3)(A), 78u(e) & 78aa(a).  Defendant Keenan Gracey (“Gracey” or 

“Defendant”) has, directly or indirectly, made use of the means or instrumentalities of 

mailto:[email protected]
mailto:[email protected]


 

COMPLAINT 2  
 

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interstate commerce, of the mails, or of the facilities of a national securities exchange 

in connection with the transactions, acts, practices and courses of business alleged in 

this complaint.  

2. Venue is proper in this district pursuant to Section 22(a) of the Securities 

Act, 15 U.S.C. § 77v(a), and Section 27(a) of the Exchange Act, 15 U.S.C. § 78aa(a), 

because certain of the transactions, acts, practices and courses of conduct constituting 

violations of the federal securities laws occurred within this district.   

SUMMARY 

3. The SEC brings this emergency action to halt an ongoing investment 

fraud by defendant Keenan Gracey.  Gracey takes investors’ money promising to 

invest in “pre-IPO” shares with a 6,000% return.  In reality, these shares do not even 

exist—there is no planned IPO.  Instead, Gracey just steals the money.  So far, he has 

taken at least $400,000 from known investors, has received over $2 million through 

approximately 107 wire transfers into his various bank accounts since 2016, and 

continues to solicit new investors.     

4. On October 11, 2017, DXC Technology Company (“DXC”), announced 

a planned merger of its public sector business division with two private companies, 

KeyPoint Government Solutions (“KeyPoint”) and Vencore, Inc. (“Vencore”), which 

are both owned by private equity funds managed by Veritas Capital Fund 

Management, LLC (“Veritas”).  The merger was initially expected to close in March 

2018, and is presently expected to close in May 2018. 

5. Claiming that he comes from a wealthy family background, Gracey 

falsely offers unsuspecting investors “pre-IPO shares” of the planned new company, 

even having them sign a “share purchase agreement.”  However, neither the IPO nor 

the shares are real.  DXC is not planning a public offering, and until the merger is 

finalized, no shares in the new company will be distributed.  Moreover, Gracey 

neither owns, nor has access to, any shares, nor has he any relationship with DXC, 

Veritas or its investment funds, nor with Vencore or KeyPoint.   



 

COMPLAINT 3  
 

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6. By engaging in this conduct, Gracey has violated, and continues to 

violate, the antifraud provisions of Sections 17(a)(1), (2) & (3) of the Securities Act, 

15 U.S.C. § 77q(a), and Section 10(b) of the Exchange Act, 15 U.S.C. § 78j(b), and 

Rules 10b-5(a), (b) and (c) thereunder, 17 C.F.R. 240.10b-5(a),(b) & (c).   

DEFENDANT 

7. Keenan Gracey, age 27, is a resident of Clyde Hill, Washington.  Gracey 

is not registered with the Commission in any capacity.   

RELATED ENTITIES 

8. DXC is a technology services company formed in 2017 from the merger 

of Computer Sciences Corporation and the Enterprise Services division of Hewlett 

Packard.  DXC is incorporated in Nevada, with its principal place of business in 

Tysons, Virginia.  DXC has been an SEC reporting company since 2017, and is 

quoted on the NYSE under the ticker symbol “DXC.” 

9. Veritas is a registered investment adviser and manages four private 

equity funds.  Veritas is a Delaware corporation founded in 2005, with its principal 

place of business in New York, New York.  It has been registered as an investment 

adviser with the SEC since 2012.   

10. KeyPoint is a private management consulting company formed in 2011.  

KeyPoint has its principal place of business in Loveland, Colorado.  KeyPoint is 

owned and controlled by funds under the management of Veritas. 

11. Vencore is a private government contractor, incorporated in Delaware in 

2010, with its principal place of business in Chantilly, Virginia.  Vencore is owned 

and controlled by funds under the management of Veritas. 

FACTUAL ALLEGATIONS 

A. Background: Gracey’s Elaborate Façade of Wealth and Success  

12. As part of an elaborate scheme to cause investors to part with their 

money, Gracey represents to investors, orally and in solicitation emails, that he comes 

from an extremely wealthy family, one with “an enormous array of military and 



 

COMPLAINT 4  
 

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governments contracts at our disposal to bolster the companies we buy.” 

13. According to numerous investors, Gracey promotes himself by 

showcasing an extravagant lifestyle, claiming to own luxury homes in Beverly Hills 

and Seattle and a fleet of luxury automobiles, including Bentleys and Ferraris.  

14. As part of his appearance of wealth, Gracey provided one or more 

investors with a heavily redacted bank statement, purporting to show that Gracey had 

immediate access to over $700 million. 

15. Gracey uses the illusion of wealth and privilege to convince investors 

that he has special access to exclusive financial transactions, claiming “multi 

generational success [that his family has] garnered through successful IPO’s and 

bringing private companies public.”   

16. In fact, Gracey’s lavish lifestyle is an elaborate façade designed to 

falsely portray himself as an international man of finance with family ties to various 

governments and government contractors, to convince investors that he has unique 

access to lucrative financial deals.   

17. Gracey does not own either of the real properties that he claims to own.     

18. Gracey rents the luxury automobiles that he claims to own. 

19. Gracey has no connection with any of the companies in the merger that 

he claims to be involved with. 

20. Given the fact that Gracey is behind in rent on the properties he claims 

to own, and that his luxury automobiles have been repossessed, on information and 

belief, Gracey does not have immediate access to $700 million. 

21. Gracey’s false portrayal of the impression that his background and 

lifestyle provided him access to financial opportunities were material to investors’ 

decisions to entrust their money to him. 

B. The Pre-IPO Investment Scheme 

22. On October 11, 2017, DXC publicly announced that it would spin off its 

public sector business division and merge it with Vencore and KeyPoint to form a 



 

COMPLAINT 5  
 

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new publicly traded company. 

23. As noted in public announcements about the merger, private equity 

funds managed by Veritas, which own and control both Vencore and KeyPoint,will 

receive approximately 14% of the shares in the new company.  The remaining shares 

in the new company, which will be called Perspecta, Inc. (“Perspecta”), will be 

distributed to DXC’s shareholders.  

24. No public offering of Perspecta shares has been announced, and contrary 

to Gracey’s representations to investors, no public offering is planned.   

25. The merger, originally expected to be finalized by March 31, 2018, is 

now expected to close in May 2018.  

26. Beginning no later than October 15, 2017, and continuing through the 

present, Gracey has used public information about the deal to lure investors into 

believing he owns or has access to pre-IPO shares in Perspecta.   

27. Gracey communicates with investors through in-person meetings, by 

phone, by email, and by texts.  

28. For example, Gracey showed several investors a DXC-created 

presentation (which is publicly available on DXC’s website) that highlighted the 

benefits of the merger and detailed the parties involved.   

29. Gracey claimed to several investors orally and in emails that his 

grandfather had a controlling interest in several investment firms, including Veritas.   

30. Based on his family’s alleged connection with Veritas, Gracey 

represented to investors orally and in emails that he made a personal investment of 

$150 million in the pre-IPO stock, and further claimed to have purchased another 

$100 million of stock on margin to sell to other investors “so as to earn [Gracey’s] 

$24 per share on the secondaries [sic] insurance market.”  

31. Gracey offered to sell portions of this additional $100 million stake in 

pre-IPO stock to investors.   

32. Several investors received a “Share Purchase Agreement” in which 



 

COMPLAINT 6  
 

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Gracey represents that he “is the owner of record of an aggregate of Series A shares 

in a private company with NDA Chartered name NewCorp, which is the product of 

the merger of parts of DXC, Vencore, Keypoint, and any other businesses involved 

(the “Corporation”) that intends to go public with an IPO, in 2018, through an 

accredited investment consortium.”   

33. In the “Share Purchase Agreement,” Gracey further represents that he is 

“the owner in clear title of the Shares and the Shares are free of any lien, 

encumbrance, security interests, charges, mortgages, pledges, or adverse claim or 

other restriction that would prevent the transfer of clear title to the Purchaser.”  

34. Gracey agreed to sell these purported pre-IPO shares to investors for $1 

a share, in the Share Purchase Agreement.  

35. Gracey told investors orally and in emails that they would recover fifty 

to sixty times their investment after the newly formed company went public.   

36. Gracey also offered a range of incentives for investors to bring in other 

investors, including offering to pay 10% of the profits he made on the “secondaries 

[sic] market” from these referrals. 

37. When he is taking investors’ money, Gracey knows, or is reckless or 

negligent in not knowing, that he does not have any access to or ownership in the 

shares he promises to provide the investors in exchange, and that he does not have the 

wealth and connections he claims to have in luring these investors.   

38. Reasonable investors would have found it important to know that the 

securities at issue did not exist and that Gracey would keep the money they gave him 

without every delivering the promised “pre-IPO” shares.  Reasonable investors would 

also have wanted to know that Gracey’s façade of wealth and connections was a ruse.  

C. Gracey’s Representations Are False 

39. Gracey knows, or is reckless or negligent in not knowing, that his 

representations about the proposed IPO and his alleged financial interest in the new 

company to be formed are false.   



 

COMPLAINT 7  
 

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40. DXC has no intention, publicly stated or otherwise, to make a public 

offering of shares in connection with the merger and formation of Perspecta.   

41. Rather, shares in Perspecta will be distributed to DXC shareholders and 

the Veritas funds with no separate offering.   

42. Gracey knows, or is reckless or negligent in not knowing, that no Series 

A shares of Perspecta are authorized by Perspecta’s articles of incorporation or 

bylaws, no Series A shares have been issued, and no shares in Perspecta can be 

acquired or distributed before the merger is finalized, which has not yet occurred.  

43. Accordingly, Gracey knows, or is reckless or negligent in not knowing, 

that his claims that he already owns shares in the new company are false. 

44. In addition, and Gracey knows, or is reckless or negligent in not 

knowing, that he holds no financial interest in KeyPoint, Vencore, or in the Veritas 

funds, which own and control those companies.   

45. The majority of Veritas’s clients are institutional investors, such as 

pension funds, and there are only three individual clients, none of whom have a 

connection to Gracey or his family. 

46. Gracey’s misrepresentations to investors were material to their decision 

to sign share purchase agreements and to give money to Gracey to purchase the pre-

IPO shares that Gracey offered and purported to own.  Reasonable investors would 

have found it important to know that the securities at issue did not exist and that the 

money paid for those securities would be misappropriated.  

D. Recent Events and Gracey’s Lulling Activities 

47. Numerous investors grew suspicious of Gracey after he indicated the 

purported IPO was “delayed,” and some investors learned that Gracey did not own 

the real estate or expensive cars that he led them to believe he owned.  

48. Several investors have demanded the return of their monies, but Gracey 

has given them an array of excuses, including falsely claiming that that the SEC has 

frozen his accounts pending completion of the merger.  



 

COMPLAINT 8  
 

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49. A group of Washington-based investors flew to Los Angeles in March 

2018 and confronted Gracey at his (rented) Beverly Hills estate.  At that time, Gracey 

agreed to refund $50,000 within a week, and to provide further details about the pre-

IPO investment. 

50.  Gracey neither refunded investors’ monies nor provided further details 

about the investment. 

51.  Instead, Gracey vacated his rented Beverly Hill estate and went to the  

state of Washington, still owing over $50,000 in unpaid rent. 

52. Nonetheless, Gracey continues to lull investors into believing their pre-

IOP investment is safe and on track. 

53.  As recently as April 30, Gracey distributed additional publicly available 

information concerning the formation of Perspecta to investors, breathlessly stating in 

at least one text message, “Trust me tho..(sic) that document right there is exactly 

what the [expletive] we all been waiting for. ”   

54. Gracey continues to solicit new investors in his pre-IPO scheme, and 

unless temporarily and permanently enjoined, will continue to do so.   

55. In carrying out his offering fraud, Gracey has used, and continues to use, 

various means and instruments of interstate commerce, including, but not limited to, 

interstate telephonic communications, email communications over the Internet, and 

interstate wire transfers of investor monies.  

FIRST CLAIM FOR RELIEF 

Fraud in the Offer or Sale of Securities 

Violations of Section 17(a)(1) and (3) of the Securities Act 

56. The SEC realleges and incorporates by reference paragraphs 1 through 

59 above. 

57. As set forth above, Gracey’s elaborate façade of wealth and success, his 

use of publicly available information concerning the merger and creation of 

Perspecta, and his claim that he has unique access to pre-IPO shares, is just an 



 

COMPLAINT 9  
 

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elaborate scheme to convert investors’ monies.  

58. By engaging in the conduct described above, Gracey, directly or 

indirectly, in the offer or sale of securities, and by the use of means or instruments of 

transportation or communication in interstate commerce or by use of the mails 

directly or indirectly, knowingly or recklessly employed devices, schemes, or 

artifices to defraud, and knowingly, recklessly or negligently engaged in transactions, 

practices, or courses of business which operated or would operate as a fraud or deceit 

upon the purchaser. 

59. By engaging in the conduct described above, Gracey violated, and unless 

restrained and enjoined will continue to violate, Section 17(a)(1) and 17(a)(3) of the 

Securities Act, 15 U.S.C. § 77q(a)(1) & (3).  

SECOND CLAIM FOR RELIEF 

Fraud in the Offer or Sale of Securities 

Violations of Sections 17(a)(2) of the Securities Act 

60. The SEC realleges and incorporates by reference paragraphs 1 through 

59 above. 

61. As set forth above, Gracey’s representations to investors, including, but 

not limited to, those made in the Share Purchase Agreement, in which he claimed to 

own pre-IPO shares, are demonstrably false. 

62. Gracey obtained money from investors by means of his material 

misstatements.  

63. By engaging in the conduct described above, Gracey, directly or 

indirectly, in the offer or sale of securities, and by the use of means or instruments of 

transportation or communication in interstate commerce or by use of the mails 

directly or indirectly, knowingly, recklessly or negligently, obtained money or 

property by means of untrue statements of material fact, any by omissions to state a 

material fact necessary in order to make the statements made, in light of the 

circumstances under which they were, not misleading.  



 

COMPLAINT 10  
 

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64. By engaging in the conduct described above, Gracey violated, and unless 

restrained and enjoined will continue to violate, Sections 17(a)(2) of the Securities 

Act, 15 U.S.C. § 77q(a)(2). 

THIRD CLAIM FOR RELIEF 

Fraud in the Connection with the Purchase and Sale of Securities 

Violations of Section 10(b) of the Exchange Act and Rule 10b-5(a) and (c) 

65. The SEC realleges and incorporates by reference paragraphs 1 through 

59 above. 

66. As set forth above, Gracey’s elaborate façade of wealth and success, his 

use of publicly available information concerning the merger and creation of 

Perspecta, and his claim that he has unique access to pre-IPO shares, is just an 

elaborate scheme to convert investors’ monies.  

67. By engaging in the conduct described above, Gracey, directly or 

indirectly, in connection with the purchase or sale of a security, by the use of means 

or instrumentalities of interstate commerce, of the mails, or of the facilities of a 

national securities exchange, knowingly or recklessly employed devices, schemes, or 

artifices to defraud, and engaged in acts, practices, or courses of business which 

operated or would operate as a fraud or deceit upon other persons. 

68. By engaging in the conduct described above, Gracey violated, and unless 

restrained and enjoined will continue to violate, Section 10(b) of the Exchange Act, 

15 U.S.C. § 78j(b), and Rules 10b-5(a) and (c) thereunder, 17 C.F.R. §§ 240.10b-5(a) 

& (c).  

FOURTH CLAIM FOR RELIEF 

Fraud in Connection with the Purchase or Sale of Securities 

Violations of Section 10(b) of the Exchange Act and Rule 10b-5(b) 

69. The SEC realleges and incorporates by reference paragraphs 1 through 

59 above. 

70. As set forth above, Gracey made material representations to investors, 



 

COMPLAINT 11  
 

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including, but not limited to those made in the Share Purchase Agreement, in which 

he claimed to own pre-IPO shares.  

71. By engaging in the conduct described above, Gracey, directly or 

indirectly, in connection with the purchase or sale of a security, and by the use of 

means or instrumentalities of interstate commerce, of the mails, or of the facilities of 

a national securities exchange, knowingly or recklessly, made untrue statements of a 

material fact or omitted to state a material fact necessary in order to make the 

statements made, in the light of the circumstances under which they were made, not 

misleading.  

72. By engaging in the conduct described above, Gracey violated, and unless 

restrained and enjoined will continue to violate, Section 10(b) of the Exchange Act, 

15 U.S.C. § 78j(b), and Rules 10b-5(b) thereunder, 17 C.F.R. §§ 240.10b-5(b).  

PRAYER FOR RELIEF 

WHEREFORE, the SEC respectfully requests that the Court: 

I. 

Issue findings of fact and conclusions of law that Defendant committed the 

alleged violations. 

II. 

Issue, in a form consistent with Fed. R. Civ. P. 65, a temporary restraining 

order and an order to show cause why a preliminary injunction should not be entered, 

temporarily and preliminarily enjoining Defendant, and his officers, agents, servants, 

employees and attorneys, and those persons in active concert or participation with 

any of them, who receive actual notice of the judgment by personal service or 

otherwise, and each of them, from violating Section 17(a)(1), (2) and (3) of the 

Securities Act [15 U.S.C. §77q(a)(1), (2) & (3)], and Section 10(b) of the Exchange 

Act [15 U.S.C. §§ 78j(b)] and Rule 10b-5(a), (b) and (c) thereunder [17 C.F.R. § 

240.10b-5(a), (b) & (c)]. 



 

COMPLAINT 12  
 

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III. 

Issue, in a form consistent with Fed. R. Civ. P. 65, a temporary restraining 

order and an order to show cause why a preliminary injunction should not be entered, 

freezing the funds and assets of Defendant; prohibiting Defendant from destroying 

documents; ordering an accounting by Defendant; and ordering expedited discovery. 

IV. 

Issue a judgment, in a form consistent with Rule 65(d) of the Federal Rules of 

Civil Procedure, permanently enjoining Defendant, and his officers, agents, servants, 

employees and attorneys, and those persons in active concert or participation with 

any of them, who receive actual notice of the judgment by personal service or 

otherwise, and each of them, from violating Section 17(a)(1), (2) and (3) of the 

Securities Act [15 U.S.C. §77q(a)(1), (2) & (3)], and Section 10(b) of the Exchange 

Act [15 U.S.C. §§ 78j(b)] and Rule 10b-5(a), (b) and (c) thereunder [17 C.F.R. § 

240.10b-5(a), (b) & (c)]. 

V. 

Issue a judgment, in a form consistent with Rule 65(d) of the Federal Rules of 

Civil Procedure, permanently enjoining Defendant from, directly or indirectly, 

participating in the issuance, purchase, offer, or sale of any securities, provided, 

however, that such injunction shall not prevent Defendant from purchasing or selling 

securities listed on a national securities exchange for his own personal account. 

VI. 

Order Defendant to disgorge all funds received from his illegal conduct, 

together with prejudgment interest thereon. 

VII. 

Order Defendant to pay civil penalties under Section 20(d) of the Securities 

Act [15 U.S.C. § 77t(d)] and Section 21(d)(3) of the Exchange Act [15 U.S.C. § 

78u(d)(3)]. 



 

COMPLAINT 13  
 

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VIII. 

Retain jurisdiction of this action in accordance with the principles of equity and 

the Federal Rules of Civil Procedure in order to implement and carry out the terms of 

all orders and decrees that may be entered, or to entertain any suitable application or 

motion for additional relief within the jurisdiction of this Court. 

IX. 

Grant such other and further relief as this Court may determine to be just and 

necessary. 

Dated:  May 9, 2018  
 /s/ Alec Johnson   

Alec Johnson 
Donald W. Searles 
Attorneys for Plaintiff 
Securities and Exchange Commission 
 

 
 


	A. Background: Gracey’s Elaborate Façade of Wealth and Success
	B. The Pre-IPO Investment Scheme
	C. Gracey’s Representations Are False
	D. Recent Events and Gracey’s Lulling Activities