[ by Howard Haykin ] The SEC Thursday charged a former broker in Orlando, FL, with defrauding investors in an astrology-based Ponzi scheme. The Defendant. Gurudeo “Buddy” Persaud, 47, resides in Orlando, Florida. He was a registered rep a FL-based broker-dealer from 2003 until 2010.  More recently, he operated White Elephant Trading Company LLC, which he created in 2007 and now is inactive. SEC Findings and Allegations. Buddy” Persaud allegedly lured family, friends, and others into investing in his firm, White Elephant.  He falsely guaranteed their money would be safe and would yield returns ranging from 5% to 18%.  He planned to invest the debt, stock, futures, and real estate markets, but did not reveal that his trading strategy - which was based on his belief that markets are affected by gravitational forces. Persaud allegedly used investors’ money to make payments to other investors, the hallmark of a Ponzi scheme. He lost $400K of investor funds through his trading and diverted at least $415K for personal expenditures.  All told, he raised over $1 million from at least 14 investors between July 2007 and January 2010.  Persaud created phony accounts statements to hide his trading losses and give investors a false sense of security In terms of actual trading and investing,... it's alleged that Persaud chiefly relied on an Internet service that provided directional market forecasts based on lunar cycles and gravitational pull.  His strategy was premised on the idea that gravitational forces affect mass human behavior and, in turn, the stock market.

e.g. - Persaud believed that when the moon exerts greater gravitational pull on the Earth, people feel dejected and are more inclined to sell securities.

The SEC seeks disgorgement of ill-gotten gains, financial penalties, and injunctive relief against Persaud. SEC Miami Office Staff Credits. Investigation by Senior Counsel Rachel Paulose, and Accountant Karaz Zaki, supervised by Assistant Regional Director Elisha Frank, assisted by examiners Anson Kwong, Brian Dyer, Exam Mgr George Franceschini, Assistant Regional Director Nicholas Monaco, Associate Regional Director John Mattimore.  Amie Riggle Berlin will lead the litigation. For further details, go to:  [SEC PR 12-118, 6/21/12] and   [SEC Complaint].