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Home > Blog > Former Wachovia Reps Preyed On Elderly, SEC Says

Former Wachovia Reps Preyed On Elderly, SEC Says

Ex-Wachovia Securities brokers William Harrison and Eddie Sawyers told clients they had a “sure thing” for them to invest in – complete with 35% returns and no chance of losing their principal. Instead, investors ended up losing $8 million.

In a federal fraud lawsuit filed last week, the Securities and Exchange Commission (SEC) says Harrison, 33, and Sawyers, 45, created a “business” called Harrison/Sawyers Financial Services as a subterfuge to entice their clients to invest in a new investment product that promised big returns and no risk. The SEC says the two focused almost entirely on elderly customers, many of whom were unsophisticated investors.

According to the complaint, Harrison and Sawyers made numerous misrepresentations about the products they were selling. In one instance, Harrison told an investor that the money was being placed in stocks, when it was actually being used for high-risk options trading. The SEC says both men asked clients to sign blank forms, then filled out the forms designating Harrison’s wife, Deana, as the clients’ agent and power of attorney.

Harrison and Sawyers also created user IDs and passwords for some clients’ accounts on an online trading site called optionsXpress, as well as set up the accounts so that clients wouldn’t receive statements, according to the charges.

Meanwhile, Harrison and Sawyers were profiting from their scheme. In July 2008, the two men withdrew $234,000.

In early fall, as the financial crisis began to take hold, Harrison and Sawyers started to lose large amounts of their clients’ money. Some clients’ accounts fell 70%. One couple invested $100,000 and later learned that their account had dwindled to $16,000, the lawsuit says.

Harrison resigned from Wachovia Securities on Oct. 13, 2008. In his letter of resignation, he stated that he had “misdirected” $6.6 million of his clients’ money. Sawyers resigned the following day.

Most of the investors who became victims of Harrison and Sawyers had their money in conservative investment products and no knowledge of how to invest in stocks and bonds or how to read financial statements. Many were retired and living on fixed incomes, the SEC says.

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