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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 purchasers of $7 million, in line with the Division of Justice.

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

“This funding advisor breached the belief of not less than a dozen purchasers, taking up $7 million—cash he promised would go to low-risk investments—and used it to line his pockets, shopping for actual property, luxurious automobiles and holidays,” U.S. Legal professional 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 line with his BrokerCheck profile

Beginning in 2012, Good started operating a Ponzi scheme on quite a lot of his purchasers by soliciting investments for purported actual property initiatives and municipal bonds. In response to the SEC’s criticism, he advised purchasers the investments have been low-risk and would supply returns as excessive as 10% over three to 6 months.

To finish the investments, Good satisfied purchasers to entry liquid asset strains 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 line with the DOJ. 

Nevertheless, 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 line 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 rental, automobiles 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 line with the Justice Division. 

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

One among Good’s Morgan Stanley purchasers was a divorced mom of two youngsters who’d acquired practically $2 million from a divorce settlement, and labored with him to take a position it, in line with the SEC. In February, the shopper recorded two calls with him, wherein he stated he was engaged on returning her funds.

“As well as, Good discouraged (the investor) from contacting legislation 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 criticism learn. 

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



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