Formerly registered with Morgan Stanley, Wilmington, North Carolina-based financial advisor Shawn Good has been accused of operating a $4.8 million Ponzi scheme by the Securities and Exchange Commission (SEC). According to reported news, he faces two charges of felony. A federal judge in North Carolina has barred him from selling securities based on the permanent injunction request of the SEC.
Based on a filing signed by U.S. Attorney Michael Easley for the Eastern District of North Carolina, the Triangle Business Journal has reported the charges as money laundering and wire fraud connected to an alleged Ponzi scheme and that clients of Morgan Stanley were involved.
In classic Ponzi fashion, after promising returns of between 6 and 10 percent to investors within a few months, Good started repaying older investors with money received from newer ones. In addition, he squirreled money away for personal use.
Good is being asked to surrender the $3.2 million prosecutors say he made from the scheme, apart from his homes in Broward County and Wrightsville Beach, Florida.
Charges similar to the civil case of SEC have been leveled in the federal criminal case, which reveals more sordid details of Good’s use of the money. Apart from settling over $800K in credit card bills, Good apparently paid for his Alfa Romeo Stelvio and Tesla with the misappropriated funds. Over $100K was remitted through Venmo, the payment platform, with accompanying messages like “Hotel for Destiny” and “because you’re sexy.”
According to his BrokerCheck profile, Good was a registered representative of Morgan Stanley from December 2012 till his termination in March 2022. According to the firm, the termination was over the client’s accusations that he refused to cooperate.
He was barred by FINRA (Financial Industry Regulatory Authority) in April 2022 when he refused to appear for testimony in FINRA’s investigation into his dismissal by Morgan Stanley.
Ponzi Scheme Fraud is a form of investment fraud in which investors are lured into investing in a scheme that will later pay out profits to earlier investors with funds from newer investors. This is a very common type of investment fraud that can be very costly and difficult to detect. However, there are a few ways to protect yourself from falling victim to this type of fraud.
A Ponzi scheme is a form of fraud that is designed to lure investors into a program that will pay profits to earlier investors using funds from newer investors. Unfortunately, this type of scam is not uncommon, and the best way to avoid it is to do your own research. This article will outline the warning signs of a Ponzi scheme and how to avoid falling victim to one.
The first and most obvious warning sign is an unregistered investment firm. A Ponzi scheme can grow and spread very quickly if the wrongdoer is a well-known financial firm that does not supervise its agents and fails to question any red flags. Ponzi schemes also often target unsophisticated investors. Often, these investors are referred to the scheme by friends or family members who may have a close affiliation with the promoter.
The best way to protect yourself from becoming a victim of Ponzi scheme fraud is to know your rights. If you believe your money was lost in this type of fraud, contact a securities attorney as soon as possible. Your lawyer will work to help you prove your case. Moreover, you should report your suspicion to the SEC and FBI. Your case will be taken further if you contact them after the Ponzi scheme fraud has occurred.
Once a Ponzi scheme has reached the stage where it cannot attract new investors, it will eventually collapse. The promoters will usually try to flee with the rest of the funds when this occurs. As the returns promised to new investors exceed the new investments, the promoter will begin a massive attempt at absconding with the remaining funds.