Mobile Edition
Print
Get the Mag
Weekly UpdatesThe assets of W. Darrell Lainhart of Sherwood, his wife, their companies and two business associates have been frozen by a temporary retraining order issued by Pulaski County Circuit Judge Timothy Fox.
The order had been requested by A. Heath Abshure, commissioner of the Arkansas Securities Department, after a staff investigation concluded that the Lainharts had engaged in securities fraud dating back to 1993.
Specifically, the Securities Department alleged, Darrell and Irene "Mattie" Lainhart, along with Rex Robertson of Little Rock and James Stead Jr. of Chicago, collected at least $12.8 million--$8 million of which went straight to the Lainharts--by selling shares of unregistered stock in a company called Clean Technology International Corp. CTIC purports to have developed a machine that can dispose of hazardous waste and, as a byproduct of the process, produce valuable carbon nanospheres.
Fox also granted Abshure's request that Lainhart and the other defendants, who are not licensed to sell securities in Arkansas, be restrained from offering or selling any securities in Arkansas or destroying any financial records. The department's request that a receiver be appointed to plow through 16 years worth of history will be considered at a hearing scheduled for Aug. 18.
As Arkansas Business reported in April, many of Lainhart's investors are Arkansans, and many of them firmly believe in the potential of the CTIC technology. The Securities Department's complaint for the retraining order included affidavits from some of the same investors interviewed by Arkansas Business, including Danny Cross of Pensacola, Fla., Little Rock residents David Wardlaw and Tom Strickland, Danny Harris of North Little Rock and Rick Andrews of Cabot.
Shannon Underwood, a staff attorney for the Securities Department, said the investigation of Lainhart, CTIC and related entities bad taken nearly a year. According to the department's complaint, the financial information included in the court files had to be "stitched together" from a variety of sources.
"In order for the remedies sought herein to be effective, a more accurate accounting is needed, but can only be provided by a more in depth and wide ranging investigation and analysis, the kind that can only be provided by a receivership," the complaint said.
FEED