Former Morgan Stanley adviser in Wilmington accused of running Ponzi scheme
WILMINGTON, NC (WWAY) — A Wilmington man is accused of transferring his Morgan Stanley clients’ funds to his personal bank accounts in a Ponzi scheme that began ten years ago, according to a complaint filed by the Securities and Exchange Commission.
Shawn E. Good, 55, allegedly defrauded at least five clients—novice investors who trusted Good, including retirees and a single mother of young children—of at least $4.8 million, resulting in more than $2 million of investor losses.
According to the complaint filed in federal court, the alleged scheme started in 2012 and continued through February 2022.
Good allegedly used the fund to repay other investor victims and his personal expenses, including payments toward his Tesla, $800,000 in credit card bills, and Venmo transfers with memo lines such as “Hotel for Destiny”, “Nailz”, and “tattoo”.
Good’s bank records and other evidence show that Good raised nearly $5 million, including through at least 30 fraudulent investments since 2017. Good allegedly promised to use the clients’ funds to invest in land development projects or bonds, and low-risk or tax-free North Carolina state or municipal bonds on their behalf.
But the SEC says Good was running a Ponzi scheme, in which he used new investor funds to repay former investors.
Good appears to have returned about $2.8 million of victims’ funds, but secretly relied heavily on Ponzi victims’ investments to make the repayments. In 2020 and 2021, for example, Good is accused of using at least $1.6 million of new Ponzi-victim investments to repay other Ponzi victims.
At least three investors are currently owed money.
According to the complaint, Morgan Stanley Smith Barney, LLC terminated Good in February for refusing to cooperate with an internal review.
The SEC is seeking a permanent injunction against Good, an order directing Good to pay ‘disgorgement of all ill-gotten gains’ and to pay civil monetary penalties.