A former financial advisor from Morgan Stanley has been sentenced to over seven years in prison for operating a Ponzi scheme that targeted the firm’s clients for more than ten years. Despite the advisor using a product from Morgan Stanley to carry out the scam, the firm has been resistant to taking responsibility. Victims claim that Morgan Stanley has not only hindered their efforts to recover their money, but they are also holding them responsible for lines of credit that the advisor fraudulently convinced them to open. As one victim stated, the whole process has been traumatizing. The advisor, Shawn Edward Good, worked at Morgan Stanley’s office in Wilmington, North Carolina, until he was fired last year when the scam was discovered. He pleaded guilty to money laundering and wire fraud charges. Prosecutors revealed that Good defrauded at least a dozen clients, who believed that their investments were low risk. He instructed them to borrow against their portfolios using a Morgan Stanley product, transfer the money to him, and promised to take care of the investments. However, instead of investing the funds as promised, he spent the money on personal luxuries. By the time the scam was uncovered, he had racked up substantial credit card bills. Good was sentenced to prison and ordered to pay restitution, but it is not enough to compensate the victims fully. Some of Good’s clients filed arbitration claims against Morgan Stanley, alleging that the firm failed to properly supervise its employee. While the firm settled with at least one client, it has fought against the claims that it should be held responsible for Good’s actions. Moreover, the victims claim that the firm is still holding them accountable for their lines of credit and charging them interest. One victim stated that he has no choice but to keep his account at Morgan Stanley because of the debt. Despite the allegations, Morgan Stanley declined an interview request but stated that it will continue to cooperate with authorities and work with the claimants. The firm also claimed that it was not them who discovered the fraud but rather federal and state investigators.
Morgan Stanley Urged to Account for Ponzi Scheme as Victims Seek Answers
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