Securities Arbitration Investment Fraud Lawyers » Investment and Regulatory News » Orlando Stockbroker Indicted for Operating Ponzi Scheme

graph on money

The United States Securities Exchange Commission and the Department of Justice filed charages against Gurudeo “Buddy” Persaud. According to documents filed by the SEC 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.

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.

As part of the scheme Persuad did not invest all of the money that he received from investors, but instead used money from later investors to pay earlier investors and used significant portions of the money for his own personal use, including misappropriating approximately $415,000 to support his and his family members’ lifestyles.

Persaud sent investors account balances showing their principal contributions and the accumulated returns he promised. However, there were no trading profits when Persaud sent these account balances. Instead, there were only net trading losses and Persaud’s misappropriation of investor funds.

Until at least September 2010, Persaud was a registered stockbroker with Palm Beach Florida based Money Concepts Capital Corp.

Firm’s Duty to Supervise

Notwithstanding Persaud’s conduct, Money Concepts Capital Corp., at least through September 2010, had an absolute duty to supervise his activities during the course of his registration or association with them as a licensed stockbroker.  Accordingly,  Money Concepts Capital Corpmay be held responsible for his conduct based upon the failure to supervise, and as a control pursuant to Section 20(a) of the Exchange Act of 1934, 15 U.S.C. § 78t.

Customers purchasing these unregistered securities from Persaud ought to have their investment accounts reviewed by a professional to determine if they have been the victim of the fraud and may have the opportunity to seek recovery from Money Concepts Capital Corp.

Guiliano Law Group

Our Practice is limited to the representation of investors in claims against stockbrokers and investment professionals for fraud, the sale of unsuitable investments, breach of fiduciary duty, failure to supervise. National Practice. Contingent Fee. Free Consultation. If you have suffered losses a the result of the recommendation of inverse and leveraged ETFs by your stockbroker or investment professional and were unaware of the risk associated with these securities, contact us for a free confidential evaluation at (877) SEC-ATTY.