Securities regulators in British Columbia are accusing a former exempt market dealer rep, and two other men, of engaging in an illegal distribution.

The B.C. Securities Commission (BCSC) issued a notice of hearing Friday alleging that three B.C. residents, a B.C.-based numbered company, and a Nevada company, engaged in illegal trading and distribution of securities. The regulator charges that 0894563 B.C. Ltd. promoted and sold partnership agreements in Armadillo Energy Inc, a Nevada company that claims to be a privately owned energy corporation that owns an oil lease in Oklahoma.

The notice says that between December 2010 and April 2011, the numbered company sold Armadillo partnership agreements to at least 64 investors in Canada, raising over $2 million. A total of $781,229.27 was raised from 26 investors who were residents of B.C., it reports.

The BCSC says that the numbered company is not registered in BC, and that Armadillo has never filed a prospectus, offering memorandum or exempt distribution report in the province. It also says that the numbered company received a 19% commission on the sale of each partnership agreement.

The regulators notice names three individuals in the case, Darwin James Hajime Okano, Richard Gozdek, and Mohammed Soolaman — alleging that they solicited people to invest in the partnership agreements, executed them on behalf of Armadillo, and received a commission from the numbered company for each investment sold.

It says that Okano is the sole director of the numbered company and has never been registered to sell securities in B.C. Soolaman was registered as a dealing representative with an exempt market dealer from May 9, 2011 to January 20, 2012; and, Gozdek has never been registered either.

The BCSC’s allegations have not been proven. It plans to apply to set dates for a hearing into the allegations before a panel of commissioners on September 18.

Armadillo is also under a cease trade order from the Ontario Securities Commission (OSC), which was first issued on July 29, 2011, and on August 2, was extended to Feb. 4, 2013. The OSC has not made any allegations against the firm, or the other subjects of its cease trade order.