Ex-Morgan Stanley Advisor Runs Ponzi Scheme, Causes Investors to Lose $2M: SEC

A former Morgan Stanley adviser ran a Ponzi scheme, extorting millions of dollars from his clients — money that was used to pay off previous victims and cover personal expenses like Tesla car payments, according to the FBI.

The SEC said the advisor — identified as Shawn E. Good of Wilmington, North Carolina — was targeting “new investors” in the program, including retirees and a single mother with young children and limited income. He is said to have convinced customers to transfer money to his personal bank account.

Good is said to have defrauded his clients of at least $4.8 million in funds during the scheme, which he ran from late 2012 to at least February 2022 and resulted in more than $2 million in losses.

In a complaint filed in federal court, the SEC alleged that Good used at least $13,000 in stolen money to pay for his Tesla Model 3, $23,000 for his Alfa Romeo Stelvio and about $800,000 for outstanding credit card bills Afford.

Good sent about $110,000 of the ill-gotten money in Venmo payments to other eyebrow-raising subject lines — including “because you’re sexy,” “Hotel for Destiny,” “Nailz,” and “shopping,” according to the complaint.

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The SEC alleges that a former Morgan Stanley adviser extorted $4.8 million from clients.
AFP via Getty Images

“Good advised clients that he would use these funds to invest in real estate development projects and tax-exempt North Carolina state or local government bonds on their behalf,” the SEC’s complaint reads.

“Good also told clients that these investments were ‘low risk’ and would yield returns of between 6% and 10% over a three to six month period, although Good never provided prospectuses or written agreements to its clients confirming these returns and other depictions,” the complaint adds.

Bloomberg was the first to report it SEC Complaint.

The SEC found that one client identified as “Investor 5” was a “divorced mother of two young children who received approximately $1.9 million in her divorce settlement in early 2020.”

“Investor 5 specifically told Good that her severance package was all the money she had and that it would be her primary source of income to support herself and her two young children,” the filing reads.

According to the SEC, Morgan Stanley fired Good in February 2022 for refusing to cooperate with an internal investigation into his alleged misdeeds.

A spokesman for Morgan Stanley confirmed that Good is “no longer employed” by the bank.

“The behavior alleged in the complaint is simply unacceptable,” the spokesman said in a statement. “We are currently reviewing the matter, which affects a small number of customers, and is cooperating with the SEC and other government agencies.”

The SEC is seeking an injunction against Good and “return of ill-gotten gains,” among other remedies. Ex-Morgan Stanley Advisor Runs Ponzi Scheme, Causes Investors to Lose $2M: SEC


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