Two Former Wachovia Employees Charged with Securities Fraud
Last month, the SEC filed a civil injunctive action against two former
Wachovia employees. According to the SEC Litigation Release, the complaint
charged William K. Harrison and Eddie W. Sawyers with securities fraud
and alleged that the two men defrauded at least 42 Wachovia customers
from December of 2007 to October 2008.
The complaint further alleged that the men (as Harrison/Sawyers Financial Services) solicited Wachovia customers to invest in a securities product, which they misrepresented as having zero risk and a guaranteed 35% rate of return. The men were also accused of misleading customers about their investment strategy with claims that they "had a foolproof approach to trading options and that their principal investment was secure and would make handsome returns regardless of market volatility," according to the Litigation Release.
In an assumed attempt to keep the scam hidden, the men put much of the documentation and many of the bank accounts associated with the scam in the name of Harrison's wife. While the investment was initially successful, by October of 2008 many investors had suffered substantial losses and most of the money Harrison and Sawyers had raised was gone.
As reported in the Release, in his Oct. 13, 2008 Wachovia resignation letter, Harrison admitted to "misdirecting" $6.6 million from his Wachovia customers without their prior authorization. No further actions have been taken by the SEC as of yet.