Missouri issues order against investment firm

State officials have issued a cease and desist order against a Springfield man and his business for allegedly defrauding at least three Missouri investors.

The Secretary of State's office issued the order May 2 against Roy G. Harris and Midwest Investment Services Inc., both of Springfield, for allegedly diverting investors' funds for private use. The order prevents Harris from selling securities in violation of Missouri law and becomes a part of his record, said Jim Grebing, communications director for the Secretary of State's office.

"We have put this information into our database, which anyone can access through our toll-free hotline," Grebing said. "Many potential investors use the hotline (800-721-7996) to do background checks on those licensed to provide financial services, like selling securities, in the state of Missouri."

The order alleges that at least three Missourians invested approximately $262,500 through Harris since June 1999. Harris allegedly told investors they could make millions of dollars at low risk on a purchase of stock in Argent Capital Corporation of Nashville, Tenn. Harris also told investors they could have their funds returned at any time.

"Harris offered a very high return with minimal risk," Grebing said. "That is usually a warning sign (of fraud)."

The Missouri Securities Division began investigating Harris in December 1999. When contacted, Argent disclosed that it had no records of any Missouri investors other than Harris. Argent also disclosed that at no time did it give Harris permission on authority to sell Argent stock. In one case, Harris allegedly kept a $112,500 investment and gave a falsified subscription agreement to the Missouri investor. The investigation also revealed that Harris was not registered to sell securities in Missouri.

Assistant Commissioner of Securities Mary Hosmer said, "Our investigation to date has found that investors thought they were purchasing shares of Argent's stock, but Harris failed to tell the investors that he was buying the stocks in his own name and even keeping much of their invested funds for his personal use."

Secretary of State Rebecca McDowell Cook said her office is continuing its investigation into Harris and is also working with other law enforcement agencies.

"We want to hear immediately from anyone who has invested through Harris and Midwest Investment Services, or who has been contacted about investing," she added.

Grebing said that the cease and desist order is "an administrative action to stop him (Harris) from selling securities. It is not a criminal charge, though this is certainly on the level of a felony."

The results of the investigation are being shared with law enforcement agencies, who will decide whether to follow through with criminal charges, Grebing said.

Scott Holste, a spokesperson with the state Attorney General's Office, said "There is no legal action at this point, but we are looking into complaints from investors."

Persons who have been contacted by Midwest Investment Services, or have invested through that business and need more information, may call the Attorney General's Consumer Protection Hotline at 800-392-8222, or the Secretary of State's Office at 573-751-4936.