SEC Sues Securities Broker for ‘screwing’ Elderlies in Fraud Scheme

Jack Humphrey, Regulatory journalist
December 17, 2010 /

At least 42 investors who are mostly elderlies have fallen prey to the investment fraud scheme orchestrated by a former licensed securities broker from Wachovia Securities together with his accomplices, including his wife, losing about $8 million as stated in a complaint filed by the Securities and Exchange Commission.

Securities broker William Harrison, 33 from Pilot Mountain, and Eddie Sawyers, 45 from Mount Airy, allegedly misrepresented investments to their clients from 2007 to 2008. According to SEC, the securities broker, with Sawyers, guaranteed his clients of 35 percent returns, but used the money they extracted from the investment fraud for their risky online deals of securities trading.

The investment fraud involved the setting up of online accounts for every client that the broker could make, SEC’s lawsuit noted. Then Harrison would transfer the ill-gotten amount to an account he had set up in his wife’s name and to another joint account of the Harrisons, SEC added.

With the investment fraud scheme, the broker was able to trade securities without the knowledge of Wachovia. Harrison’s wife stood as agent for each of the unsuspecting clients who were mostly in their 50s and above, SEC said.

According to SEC’s lawsuit, two investors, a husband and a wife, who were hoaxed into the scheme got a notification from William Harrison saying that their investments worth $100,000 for the risky business called Harrison/Sawyers Financial Services, have earned them 35 percent in return, which actually had cost them about $84,000 in losses.

The securities broker, who resigned from Wachovia on May 2008, admitted his crime before the company, saying he had ‘misdirected’ a total of $6.6 million from the customers. The SEC would disgorge the securities broker of his ill-gotten gains plus pre-judgment interest and fines.

 

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