A former Morgan Stanley advisor accused of defrauding at least five clients out of nearly $5 million to purchase luxury cars and send sexy Venmo payments has been barred from the industry and charged by the SEC.
Shawn E. Good, 55, is facing allegations of launching a Ponzi scheme targeting vulnerable clients the same year he joined Morgan Stanley. Court documents say Good’s deception ran for nearly 10 years, starting in December 2012 and ending in February 2022.
It involved him soliciting clients to transfer funds to his bank account to make low-risk investments in real estate development projects and tax free government bonds.
In reality Good used those funds to repay other investor victims and cover personal expenses like payments for a Tesla Model 3, an Alfa Romeo Stelvio, international travel and more than $800,000 in credit card debt.
Court documents suggest that Good also paid for the personal expenses of a few others. Investigators found Venmo transfers from Good with the memo lines “because (you’re) sexy,” “tattoo,” “Hotel for Destiny,” “Nailz” and “shopping.”
Bank records and other evidence show that Good defrauded investors of at least $4.8 million resulting in at least $2 million of investor losses, court documents said. At least three investors are currently owed money.
Court documents said one victim is a single mother and choir singer with limited income. She relied on her assets at Morgan Stanley, gained via a divorce settlement, to pay living expenses for herself and her young children.
“But she lost $1,325,000 of those assets in Good’s Ponzi scheme, representing most of her livelihood,” court documents said. “Similarly, her mother … is another Good victim, who has lost at least $933,750 in Good’s scheme. (The mother) had specifically advised Good she needed safe investments in order to be prepared to pay nursing home expenses in future years.”
Officials said during testimony, Good invoked his Fifth Amendment right against self incrimination to nearly every question, including questions about his future plans to raise funds or conceal assets.
The SEC is seeking a temporary restraining order, injunctive relief, disgorgement of ill-gotten gains plus prejudgment interest thereon and a civil penalty. The commission also seeks a conduct-based injunction that permanently enjoins Good from directly or indirectly participating in the issuance, purchase, offer or sale of any security not for his own personal accounts.
On Friday, a temporary restraining order implementing a complete freeze on Good’s assets was modified, allowing Good to receive up to $5,000 per month from his mother to pay his living expenses.
“This modification will permit Defendant to pay his living expenses and at the same time not dissipate any of the assets subject to the asset freeze,” Good’s attorney wrote in a motion to modify the temporary restraining order. “Good is currently unemployed and requires this assistance to be able to survive and pay his monthly living expenses.”
Attempts to reach Good and his attorney for comment were unsuccessful.
Good’s case is one of
It’s also the second Ponzi scheme involving a North Carolina-based advisor who spent time at Charles Schwab in the ’90s and 2000s. In February,
Mutter’s scheme began as he ended his second stint as a rep for Charles Schwab. Records show that Mutter was associated with the firm from 1993 to 1997 and again from 2000 to 2009.
Good, meanwhile, started his more than 30-year career at Charles Schwab. He was at the firm from 1990 to 2004 before spending eight years at Wells Fargo and nine years at Morgan Stanley.
Morgan Stanley terminated Good on Feb. 14 for refusing to cooperate with an internal review related to the conduct in the SEC complaint. Morgan Stanley officials confirmed Good is no longer at the firm, saying in a provided statement that conduct in the SEC complaint is “plainly unacceptable.”
“We are currently reviewing the matter, which affects a small number of clients, and are cooperating with the SEC and other government authorities,” said the Morgan Stanley statement.
Veteran securities attorney Bill Singer, who is not involved in the case, said Good’s alleged crimes present an old-fashioned caper with a number of modern-day elements sprinkled on top that scream 2022. Trendy electric cars and Venmo payments blend with a tried-and-true method of keeping clients in the dark, creating a worst case scenario for victims and regulators.
Singer added that the sheer number of similar cases so far serve as evidence that no matter how many people get caught, the Ponzi scheme will persist. In Good’s case, his impressive history may have allowed him to keep the con going.
“This is not somebody that has a really questionable pedigree … that's not the profile that we usually see with the Ponzi guy, so to some extent, that may explain why he sort of flew under the radar,” said Singer, who writes the “
“This is not something that pops up. He’s not a guy with a history of criminal activity or fraud or somebody who bounced around at some questionable firms, which is very often what we see in Ponzi cases. And that makes it all the more dangerous.”
