ALBERTA SECURITIES COMMISSION NOTICE OF HEARING Citation Salad

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ALBERTA SECURITIES COMMISSION NOTICE OF HEARING Citation Salad Powered By Docstoc
					                        ALBERTA SECURITIES COMMISSION

                                  NOTICE OF HEARING



Citation: Salad Greenhouse Inc., Re, 2010 ABASC 336                            Date: 20100726
                                                                           Docket: ENF-007300

                   Securities Act, R.S.A. 2000, c. S-4, as amended (Act)


To:           Salad Greenhouse Inc., SG Alberta Inc., Ronald Tuttle and Michael G. Goetz


Notice:       The Alberta Securities Commission (Commission) will convene at 9:00 am on
              Friday, the 6th day of August 2010, at Calgary, Alberta, for a hearing to consider
              whether it is in the public interest to extend the cease trade order granted in this
              matter on July 23, 2010.


Location:     Alberta Securities Commission, 6th Floor, 300 – 5th Avenue SW, Calgary,
              Alberta.


Procedure:    1.     You may obtain disclosure and particulars of the allegations in this
              Notice from Richard J. Finn c/o Alberta Securities Commission, 4th Floor, 300 -
              5 Avenue SW, Calgary, Alberta, T2P 3C4, telephone 403.297.4967

              2.     You may be represented by legal counsel and you or your counsel may
              make representations and introduce relevant evidence.

              3.      If you or your counsel fails to attend on August 06, 2010, at 9:00 am, or
              as directed, the hearing may proceed in your absence and an order may be made
              against you without further notice.

              See also section 29 of the Act and Commission Rule 15-501 – Rules of Practice
              and Procedure for Commission Proceedings.




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Allegations

Summary of Breaches

1 Staff alleges that the Respondents engaged in illegal trading and distribution of the securities
of Salad Greenhouse Inc. and SG Alberta Inc. to investors in Alberta.

2 Staff alleges that the offering memoranda filed by the Respondents in connection with the
distribution of the securities of Salad Greenhouse Inc. and SG Alberta Inc. were materially
deficient and contained representations prohibited by Alberta securities laws.

3 Staff alleges that the Respondents filed Reports of Exempt Distribution (Form 45-106F2)
with the Executive Director of the Commission containing information that is untrue or
materially misleading.

4   Staff alleges that the Respondents acted contrary to the public interest.

Parties

5 The Respondent, Salad Greenhouse Inc. (Salad Greenhouse) is a company incorporated
under the laws of the Province of Alberta. Salad Greenhouse maintains a head office in
Ardrossan, Alberta and purports to carry on business as a developer of hydroponic agricultural
technology.

6 The Respondent, SG Alberta Inc. (SG Alberta) is a company incorporated under the laws of
the Province of Alberta. SG Alberta maintains a head office in Ardrossan, Alberta and purports
to carry on business as a developer and producer of hydroponic agricultural technology.

7 The Respondent, Ronald Tuttle (Tuttle) is a resident of Ardrossan, Alberta who was, at all
material times, a director and shareholder of both Salad Greenhouse and SG Alberta and who
authorized, permitted or acquiesced in the contraventions of Alberta securities laws committed
by these issuers, as described below.

8 The Respondent, Michael G. Goetz (Goetz) was, at all material times, a director and
shareholder of both Salad Greenhouse and SG Alberta who authorized, permitted or acquiesced
in the contraventions of Alberta securities laws committed by these issuers, as described below.

Circumstances
9 Salad Greenhouse has made offerings for the sale of securities to the investing public in
Alberta since April 2010. The existing Salad Greenhouse offering is for up to 2,000,000 shares
of the company’s common stock at a price of $1.00 per share.

10 The details of the Salad Greenhouse offering are described in an offering memorandum that
was filed with the Commission by Salad Greenhouse on May 4, 2010.

11 To the best of Staff’s knowledge, Salad Greenhouse has, to date, raised a total of $20,000
from Alberta investors in connection with this offering.



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12 SG Alberta has made offerings for the sale of securities to the investing public in Alberta
since February 2010. The existing SG Alberta offering is for up to 4,500,000 shares of the
company’s common stock at a price of $2.00 per share.

13 The details of the SG Alberta offering are described in two offering memoranda that were
filed with the Commission by SG Alberta on May 4, 2010 and July 19, 2010.

14 To the best of Staff’s knowledge, SG Alberta has, to date, raised a total of $51,500 from
Alberta investors in connection with this offering.

15 Staff alleges that the shares of common stock being offered by Salad Greenhouse and SG
Alberta are securities within the meaning of section 1(ggg) of the Act, and that the sales of these
securities constituted trades in the securities of each respective issuer. Staff further alleges that,
as trades in securities of issuers that had not previously been issued, these trades constituted
distributions pursuant to the Act.

16 Staff alleges that the Respondents have engaged in trading and distribution of the securities
of Salad Greenhouse and SG Alberta without registering to deal in securities, filing a prospectus
respecting such securities or claiming an applicable exemption from either of these requirements.

17 Staff alleges that the Respondents have made and are making statements to the investing
public in Alberta respecting the transferability of the securities of Salad Greenhouse and SG
Alberta that are untrue or misleading.

18 Staff alleges that the Respondents have made and are making prohibited representations to
investors. Specifically, the Respondents have made illegal statements in connection with the
issuers’ intent to honour investors’ future requests for share redemptions and a stated intention to
have one of the issuers, Salad Greenhouse, listed on an exchange. Staff alleges that both these
representations were made without the permission of the Executive Director of the Commission.

19 Staff alleges that the Respondents have filed Reports of Exempt Distribution (Form 45-
106F2) with the Commission that contain information relating to claimed exemptions that is
misleading or untrue.

Breaches
20 As a result of the above, Staff alleges that each of the Respondents:

         20.1 breached Section 75(1) of the Act by engaging in distributions of the securities of
         Salad Greenhouse and SG Alberta while not registered to deal in securities and without
         an applicable exemption from the registration requirement imposed by Alberta securities
         laws.

         20.2 breached section 110(1) of the Act by engaging in distributions of the securities of
         Salad Greenhouse and SG Alberta without having filed a preliminary prospectus or
         prospectus with the Commission and having received a receipt for same and without an
         applicable exemption from the prospectus requirement imposed by Alberta securities
         laws.


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           20.3 breached Section 92(1) and 92(3) of the Act by making representations to
           investors in connection with the issuers’ intent to honour investors’ future requests for
           share redemptions and a stated intention to have one of the issuers, Salad Greenhouse,
           listed on an exchange when neither representation had been authorized by the Executive
           Director of the Commission.

           20.4 breached Section 221.1 of the Act by filed Reports of Exempt Distribution (Form
           45-106F2) with the Commission that contain information relating to claimed exemptions
           that is misleading or untrue.



  21 Staff further alleges that the Respondents’ conduct, as described above, is contrary to the
  public interest.



                                              )   ALBERTA SECURITIES COMMISSION
Calgary, Alberta, July 26, 2010.              )
                                              )
                                              )   “Original Signed By”______________________
                                              )   John P. Petch
                                              )   Director, Enforcement




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