A civil injunctive action was filed by the SEC in Charlotte, NC, alleging that William Harrison and Eddie Sawyers used misrepresentations and omissions of material fact to defraud at least 42 Wachovia brokerage customers out of some $8mn in customer funds.

    SEC Allegations Against Pair.  From December 2007 to October 2008, Harrison and Sawyers bilked at least 42 Wachovia customers of at least $8 million.  D/B/A “Harrison / Sawyers Financial Services,” the pair began offering their Wachovia customers an investment opportunity with a guaranteed 35% return and no risk of loss of principal.  In those instances when customers were told their monies would be used for trading options, Harrison and Sawyers misrepresented the riskiness of their trading strategy - saying they had a foolproof approach to trading options and that their principal investment was secure and would make handsome returns regardless of market volatility. 

Harrison and Sawyers either opened accounts with optionsXpress in the client’s name or commingled the client’s funds in accounts opened in Harrison’s wife’s name or a joint account in the name of Harrison and his wife.  So as to not draw attention to their conduct, Harrison and Sawyers placed “limited trading authorizations” and other related documentation associated with their scheme in the name of Harrison’s wife.  The trading strategy was initially successful, but soon turned sour and it resulted in substantial investor losses.  By October 2008, most of the money had been depleted. 

    Resignation and Confession.   On 10/13/08, Harrison submitted to Wachovia a resignation letter in which he confessed to “misdirecting” $6.6 million from 17 of his Wachovia customers in order to trade online.  He also admitted that he had conducted this online trading without first securing the authorization of these 17 individuals.  No word as to what, if anything, Harrison may have done or said.   [SEC Litigation Rel. 21781, 12/16]