Charged with fraud in 2012 and having pleaded guilty in 2013, the SEC barred financial adviser Gurudeo "Buddy" Persaud for "basing investment decisions on gravitational forces of the planets"... and for running a Ponzi scheme.
Securities and Exchange Commission v. Persaud, Civil Action
According to the SEC, Persaud founded his own firm, White Elephant Trading Co. LLC while still associated with existing firm Money Concepts Capital Corp., using the new White Elephant Trading Company to solicit investments in excess of $1 million.
Investigators found that of this $1 million of raised capital, Persaud only invested a portion, with about half the money going to pay Persaud's personal expenses. In regards to the invested portion, the SEC alleged that Persaud chose an unconventional investment strategy in basing his investment choices on lunar cycles and gravitational forces while promising clients returns of between 6 and 18-percent.
The findings state that not only did he fail to met those "guaranteed" investment returns, he neglected to inform his clients that his investment strategy relied on astrology and extraterrestrial matters. For instance, Persaud used an Internet service regarding astrology and believed that when the moon exerts greater gravitational pull on the earth, people experience a decrease in mood and are more likely to sell securities.
Furthermore, Persaud allegedly used investors' money to make payments to other investments in a hallmark Ponzi scheme.
In addition, the United States District Court for the Middle District of Florida additionally ordered Persaud to pay disgorgement of $121,660. This is in addition to a dismissed civil case coinciding with the criminal case that netted a three-year prison sentence for felony fraud; At that time, Persaud's disgorgement orders represented restitution to clients in the amount of $948,340, bringing the total sum of penalties, fines and restitution to over $1 million.
If you have invested with Gurudeo Persaud or with any broker or adviser whose engagement in astrology-based or other unconventional investment strategies, a Ponzi scheme or other fraudulent conduct has proven harmful to your investments or interests, please call The Law Offices of Jonathan W. Evans & Associates at (800) 699-1881 for investigation and consultation.