On September 29, 2022, the Securities and Exchange Commission charged Jason Nordlund, a resident of Minneapolis, Minnesota, with manipulating the share price of Affinity Gold Corporation's stock to enhance the performance results of a hedge fund he managed.

As alleged in the SEC's complaint, one of the first investments Nordlund made, after creating a "friends and family" fund in July 2020, was in the stock of Affinity Gold.  During the time of the alleged conduct, Affinity Gold represented 20% of the fund's holdings on average.  Volatility in Affinity Gold's stock price allegedly caused the net asset value of the fund to fluctuate significantly.  To prevent these fluctuations in the fund's value, Nordlund allegedly implemented a coordinated but undisclosed trading strategy to "stabilize the price" of Affinity Gold stock.  The complaint alleges, with the assistance of a friend, Nordlund placed dozens of strategically timed limit orders that caused a temporary uptick in the price of the stock, particularly toward the end of each month so that he could "mark the close" of the Affinity Gold stock price.  According to the complaint, this had the effect of artificially propping up the fund's value.

The SEC further alleges that, after manipulating the stock and inflating the fund's value, Nordlund continued to sell shares of the fund to new investors, but did not disclose to prospective investors that the fund's performance figures were artificially inflated as a result of his manipulation of Affinity Gold stock.  Because the value of the fund was inflated, the shares of the fund sold at this time were also allegedly inflated in value.  According to the complaint, Nordlund's compensation was similarly inflated because it was based on the fund's total asset value.

The SEC's complaint, filed in the U.S. District Court for the District of Minnesota, charges Nordlund with violating the antifraud provisions of Section 17(a) of the Securities Act of 1933, Section 10(b) the Securities Exchange Act of 1934 and Rule 10b-5 thereunder, and Sections 206(1), 206(2), and 206(4) of the Investment Advisers Act of 1940 and Rule 206(4)-8 thereunder.  The complaint seeks injunctive relief, disgorgement of ill-gotten gains, civil penalties, a penny stock bar, and an officer and director bar.

The investigation of this matter was conducted by Sarah Hancur and Nicholas Magina, and supervised by CJ Kerstetter, of the SEC's Chicago Regional Office. The litigation will be led by Peter Senechalle.