He believed the earth’s gravitational forces impacts stock prices and that, under the influence of the moon, people tend to feel more dejected and sell off securities, according to the SEC.

And, in return the commission, charged Gurudeo “Buddy” Persaud, a former registered rep with Money Concepts in Palm Beach Gardens, Fla., with fraud. The commission accused Persaud of raising $1 million from 14 investors in a Ponzi scheme based on his astrological theories.

A spokeswoman for Money Concepts said none of Persaud's clients in the alleged fraud were Money Concepts clients.

“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,” Eric I. Bustillo, Director of the SEC’s Miami Regional Office, said in a statement.

According to the SEC’s complaint filed in U.S. District Court for the Middle District of Florida, Persaud used investors’ money to make payments to other investors, the hallmark of a Ponzi scheme.

Fittingly, the former rep attracted investments through his now defunct firm, White Elephant Trading Co. A “white elephant” refers to a business scheme, venture or possession that has no value.

Persaud’s friends and family members were not immune from this particular white elephant, according to the commission. The SEC alleged Persaud lured them and others by falsely guaranteeing their money would be safe and yield lofty returns ranging from 6% to 18%. 

Persaud told investors he would invest in the debt, stock, futures, and real estate markets, but did not reveal that his trading strategy was based on his belief that markets are affected by gravitational forces, according to the commission.

Persaud lost $400,000 of investor funds through his trading and diverted at least $415,000 to pay for his personal expenses, the SEC alleges. Persaud created phony account statements to hide his trading losses and to give investors a false sense of security, the commission says.

“Persaud preyed on people who trusted him by promising high and steady returns while hiding his unconventional trading strategy,” Bustillo said in the statement.

In making trading decisions between July of 2007 and January of 2010, Persaud chiefly relied on an Internet service that provided directional market forecasts based on lunar cycles and gravitational pull, the SEC said.  Persaud’s strategy was premised on the idea that gravitational forces affect mass human behavior, and in turn, the stock market, according to the commission

The SEC’s complaint seeks the return of ill-gotten gains, financial penalties, and injunctive relief against Persaud to enjoin him from future violations of the federal securities laws.

Persaud’s former employer Money Concepts said he no longer works for the firm and provided no further information as to his whereabouts. According to the SEC, he is not currently represented by a lawyer.

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