Corporate & Securities Law

Ex-Wachovia Brokers Accused Of Defrauding Elderly Clients

By Keith Griffin

Two former Wachovia Securities brokers - William Harrison and Eddie Sawyers - are accused of misleading dozens of elderly clients into investing in what they called a sure thing. Instead, investors lost approximately $8 million, according to a lawsuit filed Dec. 15 by the Securities and Exchange Commission (SEC).

The SEC complaint alleges that Harrison and Sawyers misrepresented the investment strategies they were selling to at least 42 clients in 2007 and 2008. Among their promises: A guarantee of 35% returns without any risk to investors? principal investment. In reality, the brokers were using investors? money to trade securities in risky online deals.

The SEC said that in July 2008, Harrison and Sawyers withdrew $234,000 from three client accounts as compensation for their management services. They split the amount.

As reported Dec. 16 by Bloomberg, the SEC accuses the duo of recruiting Wachovia investors to a new business venture called Harrison/Sawyers Financial Services.

According to the complaint, Harrison and Sawyers touted their venture as ?an essentially foolproof investment plan guaranteed to make money regardless of market conditions.?

Instead, investors - all of whom the SEC says were ?unsophisticated investors? - lost big.

In one instance, Harrison and Sawyers reportedly told a husband and wife who had invested $100,000 that their money had ?maxed out? by achieving a 35% return. In truth, the couple?s investment had lost nearly $84,000.

Most of the investors involved in the scheme were more than 50 years of age. Some were retired and living on fixed incomes, the SEC says.

In addition to allegations of misrepresentation, the lawsuit says that the two brokers set up online brokerage accounts in some clients’ names, while pooling the investment money from other clients into accounts set up in the name of Harrison’s wife and in a joint account held by the Harrisons.

If you?ve suffered losses while doing business with William Harrison and Eddie Sawyers, please contact our securities fraud team. We will evaluate your situation to determine if you have a claim.

Full post as published by Representing Investors on December 20, 2010 (boomark / email).