Roy Beyer vs ASC

TIME-LINE HIGHLIGHTS:

-Foundation Resources Oil and Gas (the Trust) was established in December 2009

and, over a period of approximately 18 months, filed a total of four Offering

Memoranda (OMs) with the ASC, raising approximately $75 million in investment

capital for the Trust.

-The Trust experienced setbacks including a significant drop in natural gas prices

(2011-2012), as a primary factor in the devaluation of the Trust.  

-Certain investors of the Trust filed a complaint with the ASC subsequently

triggering a formal investigation of the Trust.

-This formal investigation was authorized by the ASC Director of Enforcement on

December 7, 2011.

-Though not formally interviewing any of the Trustees of the Trust, the ASC issued a

Cease Trade Order (CTO) against the Trust on December 21, 2011, alleging the 4th

Offering Memorandum (OM) "was not completed in accordance with Alberta

securities laws";

The ASC’s Cease Trade Order (CTO) would have resulted in a total loss for the

Trust’s investors had measures not been taken to preserve the Trust’s assets

through means that worked around the restrictions imposed by the CTO.

-As Trustee, and working with a legal team of Gowlings, Mr. Beyer led the

restructuring process through ‘a Plan of Arrangement’, prioritizing the best interests

of the investors.

-The same group of investors who brought the initial complaint to the ASC were

also involved in actively opposing the Plan of Arrangement.

-Upon completion of the restructuring proposal, the Trustees received a 95%+

approval from the investors for the Plan of Arrangement.

-The newly formed entity went on to attract over $30 million in new institutional

investment, demonstrating that well-informed investors were confident in the assets,

the management team, and the restructuring plan.

-Thirty-nine months later, on March 20, 2015, the ASC issued a Notice of Hearing

(NOH) related to the 2011 Cease Trade Order, naming Roy J. Beyer of Calgary and

Ron Aitkens of Lethbridge in connection with allegations concerning the Trust.

-The same Notice of Hearing (NOH) also addressed allegations concerning separate

and unrelated investment projects, with different management teams and involving

more serious accusations.

-Most readers of the NOH, including lawyers, mistakenly assume that Beyer was

Named in connection with matters related to his responsibilities as Senior Marketing

Roy Beyer vs ASC Director with Harvest Group and/or in relation to certain land deals involving

allegations of fraud.

- Beyer was not Named with respect to any ASC allegations involving the land

deals mentioned in the March 20, 2015 NOH.

-Beyer was not, nor has ever been Named by the ASC with respect to any

allegation involving fraud.

-After four years of investigations and interviews with dozens of selling agents,

directors and investors, the ASC did not bring any allegations of wrongdoing against

Mr. Beyer in relation to his primary duties at the Harvest Group, including his roles as

Senior Marketing Director of Harvest Group and Ultimate Designated Person (UDP)

of Foundation Securities Inc.

- In the NOH, the matters to which the ASC particularized allegation(s) against Mr.

Beyer relate only to the Trust in his responsibility as one of four Trustees of the

Trust.

-The ASC provided no explanation as to why they Named only two (2) of the four (4)

Trustees of the Trust, though all four held equal fiduciary duty in attesting to the

accuracy of four OMs issued by the Trust.

-The ASC Hearing was held starting November 2016 and concluded with closing

Arguments, late April 2017.

-The ruling of the ASC Tribunal was released on Feb. 15, 2018, nearly 10 months

after the conclusion of the Hearing, 7 years after the Cease Trade Order of the ASC,

and nearly 8 years after the 4th OM was filed with the ASC.

-The ASC ruling determined that the 4th Offering Memorandum (OM) of the Trust—

the same OM that initially prompted complaints and led to the issuance of a Cease

Trade Order (CTO)—was complaint to securities regulations. This suggests that the

ASC’s decision to impose the CTO likely caused unnecessary harm to the Trust’s

investors.

-A Sanctions Hearing followed the tribunal decision with a final decision on sanctions

upon Beyer released Feb 18, 2019.

-Due to financial constraints brought on by a very protracted ASC Hearing process,

Beyer was unable to file an appeal of the ASC Tribunal decision with the Alberta

Court of Appeal.

Produced by Roy J Beyer, February 20, 2018

ADDITIONAL INFORMATION:

Click here for March 20, 2015 Media Release on response to ASC Notice of

Hearing.

Click here for Feb 18, 2018 ‘Media Release’ on details and implication of ASC

Decision as Relating to the Trust.

Roy Beyer vs ASC

Click here for detail on what happened to Foundation Resources (the Trust)