What You Need to Know
- An ex-Morgan Stanley rep allegedly ran a Ponzi scheme with victims including at least five clients of the firm.
- The SEC filed an emergency action and charged him with defrauding clients and misappropriating millions of dollars.
- Some of the clients’ funds were spent on luxury cars and to pay credit card bills.
The Securities and Exchange Commission filed an emergency action and charged a former Morgan Stanley broker with defrauding clients and misappropriating millions of dollars of investor funds as part of a Ponzi scheme.
In a complaint filed Monday in U.S. District Court for the Eastern District of North Carolina, the SEC charged Shawn Good, 55, of Wilmington, North Carolina, with raising at least $4.8 million from five of his clients at Morgan Stanley to make supposedly low-risk investments in tax-free bonds and land-development projects.
“Good’s Ponzi scheme ensnared at least five investment advisory clients with limited investment knowledge and who relied on Good’s investment recommendations, including a single mother of two young children who depended upon the assets to pay living expenses, a divorced and retired violin teacher, and other retirees,” according to the complaint.
Instead of investing their money, the complaint alleges that Good used new investor funds to repay prior victims of his Ponzi scheme and to pay for his own personal expenses, including luxury cars, international travel and about $800,000 in credit card…
