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Persaud Complaint

Persaud Complaint

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Published by: rabdill on Jun 22, 2012
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UNITED STATES DISTRICT
COURT
F·IL~ED
MIDDLE
DISTRICT
OF
FLORIDAz0l2
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ORLANDO DIVISION
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SECURITIES AND EXCHANGE COMMISSION,
: ,,;;Ll: SIS',IlIC
OF
fLOrtlOA
[·;'LAHOO.
fLORIDA
Plaintiff,
v.
GURUDEO PERSAUD
a/kal
BUDDY PERSAUD,Defendant.
______________________________________
~I
COMPLAINTPlaintiff Securities and Exchange Commission alleges:I. INTRODUCTION
1.
The Commission brings this action to enjoin Gurudeo "Buddy" Persaud fromviolating the registration and anti-fraud provisions
of
the federal securities laws.
2.
From no later than July 2007 until at least January 2011, Persaud, directly andthrough 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.
3.
Persaud solicited investments for White Elephant primarily though personaldiscussions where he promised to pay investors 6% to 18% annual returns. Persaud toldprospective investors this was a risk-free investment
in
White Elephant's private equity fund,which would invest in the futures market and other markets.4. Persaud touted his experience
in
the financial services industry
as
a certifiedfinancial planner and gave investors his personal guarantee their principal contributions weresecure. He made numerous misrepresentations and omissions to investors, foremost among them
Case 6:12-cv-00932-JA-GJK Document 1 Filed 06/20/12 Page 1 of 18 PageID 1
 
 
failing to disclose his trading strategies were based on lunar cycles and the gravitational pullbetween Earth and the moon.
5.
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.6.
Of
the investor money Persaud did trade, he lost $400,000, and he traded for netlosses 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 Ponzischeme fashion.
7.
Through this fraudulent conduct, Persaud violated Sections 5(a) and (c) [15U.S.C. §77e(a),(c)] and 17(a)(I), (2), and (3)
of
the Securities Act
of
1933 ("Securities Act") [ISU.S.C. §77q(a)]; Section
lOeb)
of
the Securities Exchange Act
of
1934 ("Exchange Act") [15
u.s.c.
§ 78j(b)] and Exchange Act Rule
IOb-5
[17 C.F.R. § 240.lOb-5]; Sections 206(1), 206(2),and 206(4)
of
the Investment Advisers Act ("Advisers Act") [U.S.C. §80b-6(1),(2), and (4)]; andAdvisers Act Rules 206(4)-8(a)(I) and (2) [17 C.F.R. §275.206(4)-8].
8.
The Commission asks the Court to enter: (1) a permanent injunction restrainingand enjoining Persaud from violating the federal securities laws; (2) an order directing Persaud todisgorge all ill-gotten gains, with prejudgment interest; and (3) an order directing Persaud to paycivil penalties.
2
Case 6:12-cv-00932-JA-GJK Document 1 Filed 06/20/12 Page 2 of 18 PageID 2
 
 
I. DEFENDANT
AND
RELATED ENTITIES
A.
Defendant
9.
Persaud, 47, resides
in
Orlando, Florida. He was a registered representative witha Florida-based broker-dealer from September 2003 until August 2010. Persaud operated WhiteElephant, a now inactive Florida limited liability company he created
in
June 2007.
B.
Related Entity
10.
White Elephant was a Florida company Persaud formed in June 2007 with itsprincipal place
of
business in Orlando, Florida. Persaud named two
of
his sons
as
the managingmembers. However, Persaud managed and operated White Elephant. White Elephant was aprivate equity fund that purportedly invested in securities on the national markets. WhiteElephant never registered an offering or class
of
securities under the Securities Act or theExchange Act, and was never registered with the Commission
in
any capacity. On September23, 2011, the Florida Secretary
of
State administratively dissolved White Elephant for failure tofile
an
annual report.
II. JURISDICTION
AND
VENUE
11.
This Court has jurisdiction over this action pursuant to Sections 20(b ), (d), and22(a)
of
the Securities Act [15 U.S.C. § 77t(b), t(d), and v(a)]; Sections 21(d) and
27
of
theExchange Act [15 U.S.C.
§§
78u(d), and 78aa]; and Section 214
of
the Advisers Act
[15
U.S.C.§80b-14].
12.
This Court has personal jurisdiction over Persaud, and venue is proper
in
theMiddle District
of
Florida because many
of
his acts and transactions constituting violations
of
theSecurities, Exchange, and Advisers Acts occurred in the Middle District
of
Florida. More
3
Case 6:12-cv-00932-JA-GJK Document 1 Filed 06/20/12 Page 3 of 18 PageID 3

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