Securities Lawyers Blog
The law offices of Gana Weinstein LLP are currently investigating claims that advisor Shawn Good (Good) has been accused by clients and regulators of engaging in fraudulent investment activities including undisclosed outside business activities (OBAs) and a ponzi scheme. According to records kept by The Financial Industry Regulatory Authority (FINRA), Good was employed by Morgan Stanley Smith Barney, LLC (Morgan Stanley) at the time of the activity. If you have been a victim of Good’s alleged misconduct our firm may be able to assist you in recovering funds.
On April 18, 2022, the Securities and Exchange Commission filed an emergency action and charged Good with defrauding clients and misappropriating millions of dollars of investor funds. The SEC alleges that Good engaged in a multi-year Ponzi scheme involving his clients at Morgan Stanley. Good is alleged to have defrauded his clients – novice investors who trusted him, including retirees and a single mother of young children – of at least $4.8 million. Beginning in or about December 2012 through at least February 2022, the SEC claims that Good solicited five Morgan Stanley clients to make supposed investments by transferring funds from firm accounts to his personal bank account. Good then is alleged to have solicited the clients to transfer the funds to his personal account to make low-risk investments in real-estate development projects and tax-free government bonds. It is alleged that in fact those funds were used to repay earlier victims and also to pay Good’s personal expenses, such as payments towards his Tesla, over $800,000 in credit-card bills, and Venmo transfers. The SEC claims that Good invoked his Fifth Amendment right against self-incrimination to virtually every question when confronted with his actions.
Our law firm has significant experience bringing cases on behalf of defrauded victims when their advisors engage in receiving loans from clients or selling securities sales through OBAs. The sale of unapproved investment products – is a practice known in the industry as “selling away” – a serious violation of the securities laws. In the industry the term selling away refers to when a financial advisor solicits investments in companies, promissory notes, or other securities that are not pre-approved by the broker’s affiliated firm. Sometimes those investments have some legitimacy but often times these types of investments can end up being Ponzi schemes or the advisor can be engaging in the conversion of funds.
However, federal securities laws and the FINRA rules require firms to monitor and supervise its employees in order to detect and prevent brokers from offering investments in this fashion. In order to properly supervise their brokers each firm is required to have procedures in order to monitor the activities of each advisor’s activities and interaction with the public. Selling away misconduct often occurs where brokerage firms either fail to put in place a reasonable supervisory system or fail to actually implement that system. Supervisory failures allow brokers to engage in unsupervised misconduct that can include all manner improper conduct including selling away.
In cases of selling away the investor is unaware that the advisor’s investments are improper. In many of these cases the investor will not learn that the broker’s activities were wrongful until after the investment scheme is publicized, the broker is fired or charged by law enforcement, or stops returning client calls altogether.
Good entered the securities industry in 1990. From December 2012 through March 2022 Good was registered with Morgan Stanley out of the firm’s Wilmington, North Carolina branch office location.
Investors who have suffered losses are encouraged to contact us at (800) 810-4262 for consultation. Investors may be able recover their losses through securities arbitration. The attorneys at Gana Weinstein LLP are experienced in representing investors in cases of selling away and brokerage firms failure to supervise their representatives. Our consultations are free of charge and the firm is only compensated if you recover.