Greenleaf ordered to stop selling securities in Arkansas

Springfield-based Greenleaf Cos. LLC has been ordered to stop selling securities in Arkansas, according to an Arkansas Business report.

Arkansas Securities Commissioner Heath Abshure has issued a cease-and-desist order against Greenleaf and two of its officers - co-owner Eric Gagnepain and Investor Relations Manager Misty Perkins, according to the order. The Arkansas order comes about six months after Missouri Securities Commissioner Matt Kitzi signed a cease-and-desist order prohibiting Greenleaf and its owners from selling securities in Missouri.

Missouri Secretary of State Robin Carnahan has called Greenleaf's five-year operation an "investment scheme." The real estate company's business model centers on finding investors with good credit to buy homes that Greenleaf then markets to third-party buyers with tarnished credit. Those buyers sign a contract for deed and agree to obtain conventional financing to buy the homes after three years, at which time the property investors typically receive $10,000.

The Arkansas order says securities offered by Greenleaf, Gagnepain and Perkins were not registered with the Arkansas Securities Department, and documentation provided to investors failed to disclose the risk involved. The order states that at least one Arkansas resident signed on as a Greenleaf investor and purchased a home in the Park Estates subdivision in Willard. In August 2006, Greenleaf began sending payments to the investor, who then made mortgage payments; Greenleaf ceased payments in April 2008, and the home is now in foreclosure.

A hearing on the order could be held if Greenleaf requests it within 30 days. Greenleaf officials also are scheduled to argue against civil penalties at a hearing Monday before Kitzi in Jefferson City.