SEC Enforcement Action in the Stars for Astrology Ponzi Scheme
The Securities and Exchange Commission (SEC) recently filed charges against Gurudeo “Buddy” Persaud for an alleged investment scam. According to the SEC, Persaud made many enticing promises, but he failed to tell his investors that his investment strategy was based on astrology.
The regulator alleges that Persaud offered returns of 6%-18% for investments in his company White Elephant Trading Company, LLC. He apparently stated to investors that their money would go into the expected financial instruments, but the SEC alleged that Persaud “did not reveal that his trading strategy was based on his belief that markets are affected by gravitational forces.” The SEC believes Persaud used information from a website that predicted market changes based on the effects of moon cycles and gravitational forces.
Unfortunately, the SEC alleged that Persaud was instead using money from new investors to pay off prior investors in classic Ponzi scheme fashion after sustaining losses, and that he also used hundreds of thousands of dollars for his own personal expenses. Approximately 14 investors were harmed in the alleged scam, which took in over a million dollars total.
Regarding the case, the Director of the SEC’s Miami office stated that, ““When Persaud blatantly lied to investors and hid their losses through a Ponzi scheme, he should have known that an SEC enforcement action was in the stars.”
The securities fraud attorneys with David P. Meyer & Associates have represented investors nationwide in stockbroker mediation, arbitration, and litigation claims. In light of this and other similar cases, we wish to remind investors that education is prevention. Always do your research before investing, especially if it sounds “too good to be true.”