Proceedings

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IN THE MATTER OF THE SECURITIES ACT,
R.S.O. 1990, c. S.5 AS AMENDED

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IN THE MATTER OF
GROUND WEALTH INC., ARMADILLO ENERGY INC., PAUL SCHUETT,
DOUG DEBOER, JAMES LINDE, SUSAN LAWSON, MICHELLE DUNK,
ADRION SMITH, BIANCA SOTO AND TERRY REICHERT

ENDORSEMENT



I have issued an order (the “Order”) extending the temporary cease trade order in this matter on the terms and conditions attached to this endorsement. The terms used in this endorsement that are defined in the Order are used as so defined.

The issue before me is not whether the TCTO should have been issued. The issue is whether, on the evidence before me, it should be extended. In that respect, I must satisfy myself there is sufficient evidence of conduct which may be harmful to the public interest. I am satisfied that there is such evidence.

Without deciding the issue, the Armadillo Securities appear to me to be securities within the meaning of the Act (based on my review only of the materials attached to Staff’s affidavit filed in this matter). While the circumstances in this matter, including the cooperation of the Respondents with Staff’s investigation, are different from the circumstances in which a temporary cease trade order is often issued, it nonetheless appears to me to be in the public interest to ensure that the Armadillo Securities, or any similar securities, are not illegally distributed in Ontario pending the outcome of the hearing on the merits in this matter.

There is no doubt that Staff requires additional time to complete its investigation. Further, unless the TCTO is extended, there is a reasonable possibility that the alleged objectionable conduct of the Respondents may continue. Such conduct presents a significant risk to investors and the public interest.

At the end of the day, the Respondents have not submitted to me satisfactory information to justify revoking the TCTO.

However, it also appears to me that, in these particular circumstances, the TCTO is broader than is necessary to protect investors in Ontario and the public interest. I have, accordingly, provided in the Order a carve-out from the TCTO permitting the Respondents to trade in listed securities and mutual fund securities (on the terms set forth in the Order). If any of the Respondents wishes to apply to the Commission for a broader carve-out or to trade specific securities identified to the Commission, they are free to do so.

This Order shall not prevent Staff from bringing before the Commission any application to vary, revoke or extend the TCTO or this Order.

DATED at Toronto this 11th day of August, 2011.

 

"James E. A. Turner"
James E. A. Turner

 




IN THE MATTER OF THE SECURITIES ACT,
R.S.O. 1990, c. S.5 AS AMENDED

- and -

IN THE MATTER OF
GROUND WEALTH INC., ARMADILLO ENERGY INC., PAUL SCHUETT,
DOUG DEBOER, JAMES LINDE, SUSAN LAWSON, MICHELLE DUNK,
ADRION SMITH, BIANCA SOTO AND TERRY REICHERT

TEMPORARY ORDER
(Sections 127(1) & 127(8)



        WHEREAS it appears to the Ontario Securities Commission (the “Commission”) that:

  1. Ground Wealth Inc. (“GWI”) is an Ontario corporation that operates out of 766 Hespeler Road, Suite 301, Cambridge, Ontario;
  2. Armadillo Energy Inc. (“Armadillo”) is a State of Nevada corporation;
  3. Neither Armadillo nor GWI is a reporting issuer in Ontario;
  4. Michelle Dunk (“Dunk”) is the Vice-President, Director and Secretary of GWI, and resides in Ontario;
  5. Adrion Smith (“Smith”) is President and Director of GWI, and resides in Ontario;
  6. Bianca Soto (“Soto”) is a salesperson for GWI;
  7. Terry Reichert (“Reichert”) is a salesperson for GWI;
  8. Paul Schuett (“Schuett”) is the President and Chief Executive Officer of Armadillo;
  9. Doug DeBoer (“DeBoer”) is the Chief Financial Officer and Financial Director of Armadillo;
  10. James Linde (“Linde”) is the Chief Operating Officer and Operations Manager of Armadillo;
  11. Susan Lawson (“Lawson”) is the Corporate Secretary of Armadillo;
  12. Neither Armadillo nor GWI has filed a preliminary prospectus or a prospectus and the Director has not issued a receipt in respect of these companies;
  13. GWI, Armadillo, Schuett, DeBoer, Linde, Lawson, Dunk, Smith, Soto and Reichert (collectively, the “Respondents”) have distributed, offered for sale, and sold to members of the public in Ontario, certificates evidencing an interest in oil (the “Armadillo Securities”) that Staff of the Commission (“Staff”) alleges are “securities” as defined in the Securities Act, R.S.O. 1990, c. S.5, as amended (the “Act”);
  14. On July 27, 2011, the Commission issued a temporary cease trade order (the “TCTO”) (i) pursuant to clause 2 of subsection 127(1) of the Act, that all trading in the Armadillo Securities shall cease; and (ii) pursuant to clause 2 of subsection 127(1) of the Act, that Armadillo, GWI, Schuett, DeBoer, Linde, Lawson, Dunk, Smith, Soto and Reichert cease trading in all securities;
  15. None of the Respondents is registered with the Commission in any capacity;
  16. Staff is conducting an investigation into the trading of the Armadillo Securities and whether the Respondents have contravened Ontario securities law;

    AND WHEREAS the Commission is of the opinion that it is in the public interest to make this order;

    IT IS ORDERED that the TCTO be extended to February 13, 2012 on the same terms and conditions as provided for in the TCTO; provided the TCTO shall not prevent a Respondent from trading for the Respondent’s own account, solely through a registered dealer or a registered dealer in a foreign jurisdiction (which dealer must be given a copy of this order), in (a) any “exchange traded security” or “foreign exchange traded security” within the meaning of National Instrument 21-101, provided the Respondent does not own beneficially or exercise control or direction over more than 5 per cent of the voting or equity securities of the issuer of any such securities, or (b) any security issued by a mutual fund that is a reporting issuer; and provided the Respondent provides Staff with the particulars of the accounts in which such trading is to occur before any trading in such accounts occurs.

    DATED at Toronto this 11th day of August, 2011.

 

"James E. A. Turner"
James E. A. Turner