Ex-Wachovia Brokers, William Harrison, Eddie Sawyers, Face SEC Fraud Charges
Two former Wachovia Securities brokers – William Harrison and Eddie Sawyers – are the subject of a recently filed complaint by the Securities and Exchange Commission (SEC) that accuses the two men of securities fraud and misleading investors out of roughly $8 million.
According to the complaint, Harrison and Sawyers conned dozens of mostly elderly Wachovia clients into investing in what was supposedly a “can't miss investment” strategy that guaranteed 35% returns. Instead, the former Wachovia brokers used investors' money to trade securities in risky online deals.
“Instead of safeguarding their customers' investments through suitable investments and prudent recommendations, these two brokers crossed the line with a scheme that victimized unsuspecting investors,” said William Hicks, the SEC's associate regional director for enforcement in its Atlanta office, said in a statement.
The SEC says the two men recruited Wachovia investors to a new business venture they called Harrison/Sawyers Financial Services. It was this venture that Harrison and Sawyers represented as an essentially foolproof investment plan guaranteed to make money regardless of market conditions.
In instances where customers were informed that their money would be used for trading options, Harrison and Sawyers misrepresented the riskiness of the trading strategies they actually employed. In reality, Harrison and Sawyers either opened accounts with options Xpress in a client's name or commingled client funds into accounts opened in Harrison's wife's name or a joint account in the name of Harrison and his wife.
In order to not draw attention to their scheme, Harrison and Sawyers placed “limited trading authorizations” and other related documentation associated with the scam in the name of Harrison's wife. Initially, the trading strategy was successful. However, its success was short lived. By October 2008, Harrison and Sawyers had depleted the vast majority of the money raised from investors.
On October 13, 2008, Harrison submitted a resignation letter to Wachovia, in which he confessed to “misdirecting” $6.6 million from 17 of his Wachovia customers in order to trade online. Harrison also admitted to conducting the online trading without first securing the authorization of those 17 individuals.