Former Morgan Stanley advisor ran Ponzi scheme that caused investors to lose $2M: SEC

a former Morgan Stanley consultant ponzi scheme launched And siphoned off its customers millions of dollars — money that had previously been used to pay off victims and cover personal expenses such as Tesla car payments, according to the Fed.

The SEC said the advisory — which was led by Sean E. of Wilmington, North Carolina. Good – targeted “newbie investors” in the plan, including retirees and single mothers with young children and limited income. He allegedly persuaded the customers to transfer the money to his personal bank account.

Good allegedly defrauded his clients of at least $4.8 million in funds over the course of the scheme, which he ran from late 2012 until at least February 2022, and lost more than $2 million.

In a complaint filed in federal court, the SEC alleged that Good owed at least $13,000 to pay toward his Tesla Model 3, $23,000 toward his Alfa Romeo Stelvio, and nearly $800,000 toward outstanding credit card bills. paid to.

According to the complaint, Good sent some $110,000 in Venmo payments to others with eyebrow-raising subject lines — including “Because you’re sexy,” “Hotel for Destiny,” “Nelz” and “Shopping.” ,

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The SEC alleges that a former Morgan Stanley advisor billed clients out of $4.8 million.
AFP via Getty Images

“Good told clients that he would use these funds to invest in land development projects and tax-exempt North Carolina state or municipal bonds,” the SEC’s complaint said.

“Good also told clients that these investments were ‘low-risk’ and would pay returns of between 6% and 10% in three-month or six-month terms, although Good never told customers through prospectus or written agreements.” did not provide to substantiate these promises with returns and other representations,” the complaint said.

bloomberg was the first to report on SEC complaint,

The SEC noted that one client, identified as “Investor 5,” was a “divorced mother of two young children who received approximately $1.9 million in her divorce settlement in early 2020.”

“Investor 5 exclusively told Good that his disposal was all the money he had with him and that it would be his primary source of income to care for himself and their two young children,” the filing said.

According to the SEC, Morgan Stanley fired Good in February 2022 for refusing to cooperate with an internal investigation into his alleged misdeeds.

A Morgan Stanley spokesperson confirmed that Good is “no longer employed” by the bank.

“The conduct alleged in the complaint is clearly unacceptable,” the spokesperson said in a statement. “We are currently reviewing the matter, which affects a small number of clients, and are cooperating with the SEC and other government officials.”

The SEC is seeking an injunction against “wrongful profit misappropriation” along with Good, among other legal remedies.

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