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HomeWealth ManagementFormer Morgan Stanley Advisors Pleads Responsible to $7M Ponzi Scheme

Former Morgan Stanley Advisors Pleads Responsible to $7M Ponzi Scheme


A former Morgan Stanley advisor faces as much as 30 years in jail after pleading responsible to defrauding shoppers of $7 million, in keeping with the Division of Justice.

Shawn Edward Good pleaded responsible in North Carolina federal court docket to counts of wire fraud and cash laundering for working the scheme, after being charged by the DOJ earlier this 12 months. (He additionally confronted related costs from the Securities and Change Fee in April.) 

“This funding advisor breached the belief of no less than a dozen shoppers, taking on $7 million—cash he promised would go to low-risk investments—and used it to line his pockets, shopping for actual property, luxurious vehicles and holidays,” U.S. Lawyer Michael Easley stated. “This decade-long rip-off has lastly come to an finish.”

Good labored as a registered rep and funding advisor consultant for Morgan Stanley from 2012 to 2022, and with Wells Fargo and Charles Schwab previous to that, in keeping with his BrokerCheck profile

Beginning in 2012, Good started working a Ponzi scheme on quite a lot of his shoppers by soliciting investments for purported actual property tasks and municipal bonds. In accordance with the SEC’s grievance, he instructed shoppers the investments have been low-risk and would provide returns as excessive as 10% over three to 6 months.

To finish the investments, Good satisfied shoppers to entry liquid asset traces of credit score backed by their Morgan Stanley accounts, and would direct them to switch these funds into their very own private financial institution accounts after which into his personal private account, in keeping with the DOJ. 

Nonetheless, Good didn’t use the cash to spend money on the true property or bonds, however as a substitute he used new buyers’ funds to repay earlier buyers; in 2020 and 2021 alone, he used about $1.6 million of latest funds to pay again buyers, in keeping with the SEC.

He additionally used the funds for private bills, together with funds on his home in Wilmington, N.C., in addition to a Florida apartment, vehicles that included a Mercedes Benz, a Porsche Boxster, a Tesla, an Alpha Romero Stelvio and a Lexus, in addition to holidays to Paris, Italy, Wyoming and Las Vegas, in keeping with the Justice Division. 

There have been additionally greater than $110,000 in Venmo funds, with memo traces together with “as a result of youre attractive (sic), “tattoo,” and “Resort for Future,” amongst others, in keeping with the SEC grievance from April.

Considered one of Good’s Morgan Stanley shoppers was a divorced mom of two youngsters who’d obtained almost $2 million from a divorce settlement, and labored with him to speculate it, in keeping with the SEC. In February, the shopper recorded two calls with him, by which he stated he was engaged on returning her funds.

“As well as, Good discouraged (the investor) from contacting regulation enforcement and from hiring a lawyer, who Good stated would begin ‘digging round’ and thus ‘hamstring’ Good’s efforts to redeem the supposed investments,” the SEC grievance learn. 

Morgan Stanley declined to remark, however in keeping with the SEC, the agency fired Good in February after he’d refused to cooperate with an inside investigation in regards to the purported scheme.

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