FT Alphaville " Lunar investing scheme eclipsed* by reality, SEC Awesome... The primary principle underlying Persaud's trading strategy was that the gravitational pull between the moon and Earth affects mass human behavior, which in tum affects the stock markets. For example, Persaud believed that when the moon is positioned so there is a greater gravitational pull on humans, they feel down and are therefore more inclined to sell securities in the markets. And by awesome we mean the opposite of awesome... The Commission brings this action to enjoin Gurudeo "Buddy" Persaud from violating the registration and anti-fraud provisions of the federal securities laws. From no later than July 2007 until at least January 2011, Persaud, directly and through his company, While Elephant Trading Company LLC, operated an offering fraud that, by November 7, 2007, devolved into a Ponzi scheme. All told, Persaud raised more than $1 million from investors through this fraudulent scheme. Persaud solicited investments for White Elephant primarily though personal discussions where he promised to pay investors 6% to 18% annual returns. Persaud told prospective investors this was a risk-free investment in White Elephant's private equity fund, which would invest in the futures market and other markets. Persaud touted his experience in the financial services industry as a certified financial planner and gave investors his personal guarantee their principal contributions were secure. He made numerous misrepresentations and omissions to investors, foremost among them failing to disclose his trading strategies were based on lunar cycles and the gravitational pull between Earth and the moon. Persaud also omitted disclosing that he misappropriated approximately $415,000, representing nearly half of the investors" contributions, to support his and his family members" lifestyles. Of the investor money Persaud did trade, he lost $400,000, and he traded for net losses beginning the first month he received investor contributions. To hide this from investors, Persaud repaid earlier investors with money collected from new investors in typical Ponzi scheme fashion. ... By February 2011, there were no funds remaining in the White Elephant bank accounts because Persaud misappropriated investor contributions, fraudulently paid investor contributions as purported investment returns to conceal investor losses, and lost the remainder of investors" money in trading based on his lunar cycle trading strategy. All just alleged at this point. This entry was posted by Cardiff Garcia on Thursday, June 21st, 2012 at 18:05 and is filed under Capital markets. Tagged with Gurudeo "Buddy" Persaud.