Securities and Exchange Commission v Jason Nordlund Complaint

UNITED STATES DISTRICT COURT FOR THE
DISTRICT OF MINNESOTA
__________________________________________
       :
UNITED STATES SECURITIES  :
AND EXCHANGE COMMISSION,  :
       :
   Plaintiff,   :
       :          CASE NO. 22-cv-2406
  v.       :
       :
JASON NORDLUND,      : JURY DEMANDED
       :
   Defendant.
    :
       :
_________________________________________  :

COMPLAINT

 Plaintiff United States Securities and Exchange Commission (the “SEC” or
“Commission”) alleges as follows:
1. Between at least August and December 2020, Defendant Jason
Nordlund orchestrated a fraudulent scheme to inflate the value of a private hedge
fund he managed, Norstar F&F Capital, LLC (the “Fund”) by manipulating the
price of the stock of Affinity Gold Corporation (“Affinity Gold”), which was one of
the Fund’s largest holdings.
2. Nordlund effectuated his fraudulent scheme by manipulating the price
of Affinity Gold stock on an ongoing basis and then “marking the close,” a practice
in which a trader seeks to drive up the closing price of a stock by placing multiple
buy orders at or near the close of the trading day or the end of the month.
Specifically, Nordlund funneled money from the Fund to a bank account held by a

 2
friend (Nordlund’s “Friend”). Nordlund then instructed his Friend to place limit
orders to buy Affinity Gold stock, typically at prices above the then-quoted price for
the stock. Based on these instructions, Nordlund’s Friend purchased Affinity Gold
stock more than 100 times between August and December 2020, typically in small
quantities.
3. During this period, the Friend’s orders often set the high price for the
day, were above the day’s opening prices, and were above prices being paid by other
traders on the day. Toward the end of the month, when Nordlund would report
account balances to the Fund’s investors, the Friend’s orders increased in frequency
and size. As a result of these manipulative orders, the price of Affinity Gold stock
jumped significantly on the last trading day in September, October and November
2020.
4. As Nordlund knew, his manipulation of Affinity Gold stock had the
effect of artificially inflating the value of the stock and, in turn, the net asset value of
the Fund and the value of each investor’s share of the Fund. Nordlund then reported
these inflated account balances to his investors in emails Nordlund sent to the
investors reporting the value of their personal investments in the Fund. These reports
did not disclose that the value of the Fund’s holdings of Affinity Gold stock were
inflated or Nordlund’s role in manipulating the value of the stock. In addition to
including the inflated performance values in monthly emails to existing investors,
Nordlund referenced the inflated performance values in statements to prospective
investors. Given that Affinity Gold accounted for approximately 20% of the Fund’s

 3
holdings, information about its inflated value and the consequent effect on the
Fund’s value, was important to investors.
5.  Nordlund’s manipulation of Affinity Gold stock and the resulting
impact on the value of the Fund harmed investors in several ways. First, Nordlund
used the inflated value of the Fund when soliciting new investments, without
disclosing to these prospective investors his involvement in manipulating the price of
Affinity Gold stock. Second, and relatedly, new investors in the Fund during this
period paid higher prices due to the inflated value of the Fund. Third, because
Nordlund’s compensation was based on the Fund’s value, he received greater value
than he was entitled to receive to the detriment of the Fund and other investors.
6. Based on the conduct above, Nordlund engaged in a fraudulent scheme
to manipulate the price of Affinity Gold stock and artificially inflate the value of the
Fund, and also made false statements and misleading omissions to existing and
prospective Fund investors about the impact of his manipulation on the Fund’s value
in violation of Section 17(a) of the Securities Act of 1933 (“Securities Act”), 15
U.S.C. § 77q(a), Section 10(b) of the Securities Exchange Act of 1934 (the
“Exchange Act”), 15 U.S.C. § 78j(b), and Rule 10b-5 thereunder, 17 C.F.R. 240.10b-
5, and Section 206 of the Investment Advisers Act of 1940 (“Advisers Act”), 15
U.S.C. § 78(p)(a) and Rule 206(4)-8 thereunder, 17 CFR § 275.206(4)-8.
7. Unless Defendant Nordlund is permanently restrained and enjoined, he
will continue to engage in the acts, practices, and courses of business set forth in this
Complaint, and in acts, practices and courses of business of similar type and object.

 4
JURISDICTION AND VENUE
8. The SEC brings this action under Section 20(b) and (d) of the Securities
Act, 15 U.S.C. § 77t(b) & (d), Sections 21(d) and (e) of the Exchange Act, 15 U.S.C.
§§ 78u(d) and 78u(e), and Sections 209(d) and (e) of the Advisers Act, 15 U.S.C. §
80b-9(d)-(e).
9. This Court has jurisdiction over this action under Section 22(a) of the
Securities Act, 15 U.S.C. § 77v(a), Section 27(a) of the Exchange Act, 15 U.S.C. §
78aa(a), and Section 214 of the Advisers Act, 15 U.S.C. § 80b-14, and 28 U.S.C. §
1331.
10. Venue is proper in this Court pursuant to Section 22(a) of the Securities
Act, 15 U.S.C. § 77v(a), Section 27(a) of the Exchange Act, 15 U.S.C. § 78aa(a) and
Section 214(a) of the Advisers Act. The Defendant is an inhabitant of, is found in,
and transacts business in the District of Minnesota, and many of the acts and
transactions constituting the violations alleged in this Complaint occurred within the
District of Minnesota.
11. Defendant Nordlund directly and indirectly made use of the means or
instruments of transportation or communication in interstate commerce, or the
means and instrumentalities of interstate commerce, or of the mails, or of any facility
of any national securities exchange in connection with the acts, practices, and
courses of business alleged herein.

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DEFENDANT
12. Jason Nordlund, age 44, lives in Minneapolis, Minnesota and is the
CEO and principal of several investment related companies, including Norstar
Capital LLC (“Norstar Management”) and the Fund. From September 2017 to
February 2021, Nordlund was a member of Affinity Gold’s board of directors and
served as its investor relations manager. He owned, and still owns, a significant
number of shares of Affinity Gold stock.
RELATED ENTITIES
13. The Fund is an open-ended, multi-member private investment fund
based in Minneapolis, Minnesota. The Fund is managed by Norstar Management, a
Minnesota limited liability company, formerly known as Norstar Wealth
Management LLC, which is owned and controlled by Nordlund. The Fund invests
in a variety of investments selected by Nordlund, including stocks, private
placements, and precious metals. During the relevant period, the Fund had
approximately 45 investors and approximately $800,000 in assets.
14. Affinity Gold is a Nevada corporation, headquartered in Maple Grove,
Minnesota. Affinity Gold was formed in 2007 and purports to be a metal and
mineral mining company. It is a penny stock company and its common stock was
quoted on OTC Link until September 2021 and traded under the ticker “AFYG.”
Affinity Gold has never had a class of securities registered under the Exchange Act.
Beginning in 2007 Affinity Gold became obligated to file reports pursuant to

 6
Exchange Act Section 15(d), but that duty to file is currently suspended due to a very
small number of holders of record. Affinity Gold’s website has not been updated
since 2014.
FACTS
15. Defendant Nordlund is an entrepreneur and investor. Defendant
Nordlund created the Fund in approximately July 2020 after receiving requests from
his friends and family for help with their investments.
16. The Fund was managed by Norstar Management, Nordlund’s entity,
and Nordlund made all investment decisions for the Fund.
17. During the relevant time, the Fund had approximately 45 investors and
assets of approximately $800,000.
18. Norstar Management and, in turn, Nordlund, received compensation
for managing the Fund by collecting a fee when investors redeemed their shares of
the Fund, equal to 50% of the value in excess of the investor’s capital contribution,
rather than charging a periodic fee based on the Fund’s assets.
19. Because the Fund was “open-ended,” Nordlund was permitted to, and
occasionally did, solicit new investors to purchase interests in the Fund. New shares
in the Fund were sold at a price based on the net asset value of the Fund divided by
the number of outstanding shares in the Fund.
Nordlund Purchased Affinity Gold Stock for the Fund
20. One of the first investments Nordlund made on the Fund’s behalf was
in the stock of Affinity Gold. Between approximately July and August 2020,

 7
Nordlund caused the Fund to purchase more than 4.1 million shares of Affinity
Gold. At all relevant times, Affinity Gold represented, on average, 20% of the Fund’s
holdings and was one of its largest investments.
21. Affinity Gold’s stock was thinly traded during the relevant period. The
average daily volume of trading in Affinity Gold during the first half of 2020 was
approximately 26,917 shares traded per day. Nordlund was aware of this fact at the
time he purchased Affinity Gold stock for the Fund.
22. The low volume of trading in Affinity Gold stock resulted in a large
spread between the bid price and the ask price for Affinity Gold stock, which in turn
led to volatility in the stock price.
23. In or around August 2020, Nordlund became aware that the volatility
in the price of Affinity Gold stock was causing the net asset value of the Fund to
fluctuate significantly.
24. Nordlund, who tracked the Fund’s performance on a weekly basis,
became “uncomfortable that [the stock price of Affinity Gold] had the ability to . . .
draw . . . down significantly” the value of the Fund.
Nordlund’s Strategy to Manipulate the Price of Affinity Gold Stock
25. To prevent fluctuations in the Fund’s value, Nordlund implemented a
coordinated but undisclosed trading strategy to “stabilize the price” of Affinity Gold
stock.
26. In or around August 2020, Nordlund asked his Friend to help “stabilize
that price and just keep it consistent with where the majority of the trading was

 8
occurring.” Nordlund then transferred $20,000 from the Fund to a bank account that
his Friend could access.
27. When Nordlund wanted his Friend to purchase stock, he would contact
the Friend and ask him to place a limit order for Affinity Gold stock. Nordlund’s
Friend would then enter the orders in a personal brokerage account held in the
Friend’s name.
28. Nordlund’s Friend typically purchased relatively small quantities of
Affinity Gold stock using limit orders set above the price at which Affinity Gold
stock was trading at the time. Between August and December 2020, Nordlund’s
Friend purchased Affinity Gold stock more than 100 times.
29. The orders Nordlund’s Friend placed on Nordlund’s behalf often set the
high price for Affinity Gold stock on the particular trading day. The orders were
frequently set higher than the opening price of Affinity Gold stock and at high prices
despite concurrent trading by other traders at lower prices.
30. Nordlund’s Friend’s stock purchases increased in frequency and size at
the end of each month. Consequently, the price of Affinity Gold stock increased
significantly on the last trading day in September, October and November 2020.
Nordlund Reported Inflated Performance Values to New and Existing Investors
31. Nordlund’s month-end marking the close of Affinity Gold stock inflated
the value of the Fund’s position in Affinity Gold between 13% and 99% on the last
day of the month in September, October and November 2020. Because Affinity Gold
stock was one of the Fund’s largest holdings, Nordlund’s month-end marking the

 9
close impacted the Fund’s monthly performance by artificially propping up the
Fund’s value.
32. Nordlund knew that his marking of the close artificially inflated the
price of Affinity Gold’s stock and, in turn, the value of the Fund.
33. Each month, Nordlund provided Fund investors with an email
reflecting the balance of their portion of the Fund’s equity. Nordlund also drafted
and distributed to investors monthly newsletters summarizing the Fund’s
performance in the previous month.
34. In emails Nordlund sent to Fund investors, Nordlund did not disclose
that the monthly performance figures were inflated by his manipulation of the price
of Affinity Gold stock.
35. After manipulating the stock and inflating the Fund’s value, Nordlund
continued to sell shares of the Fund to investors.
36. Nordlund occasionally provided these prospective investors with
monthly performance figures to demonstrate his success and solicit new investments.
Nordlund did not disclose to these prospective investors that the Fund’s performance
figures were artificially inflated as a result of his manipulation of Affinity Gold stock.
37. For example, On September 1, 2020, Nordlund forwarded one
prospective investor an email Nordlund had sent to an existing investor showing a
balance of $130,196. Nordlund wrote that the existing investor had “started with
exactly $39.5k 12 weeks ago.” Less than a month after receiving this email, the
prospective investor invested $7,000 in the Fund.

 10
38. Given that Affinity Gold represented approximately 20% of the Fund’s
portfolio, information about Nordlund’s manipulation of the stock price and the
resulting impact on the Fund’s net asset value, would have been important to
investors.
39. In addition, when Nordlund sold shares of the Fund to these new
investors, the purchase price was based on the net asset value of the Fund divided by
all outstanding shares. Because the value of the Fund was inflated as a result of the
manipulation of Affinity Gold stock, the shares of the Fund sold at this time were
also inflated in value.
40. At the time he sold shares to new investors, Nordlund knew that the
value of the Fund, and thus the price of the new shares in the Fund, had been
inflated by his manipulation of Affinity Gold stock.
41. These investors would have considered it important to know that they
were paying a higher price for their interests in the Fund as a result of Nordlund’s
manipulation of the price of Affinity Gold stock.
42. Similarly, as alleged in Paragraph 18, Nordlund’s compensation was
based on the value of the Fund. In other words, any increase in the value of the Fund
had the effect of increasing Nordlund’s compensation.
43. By inflating the value of the Fund, Nordlund, and the investors who
redeemed profits at this time, received greater value than they were entitled to
receive, to the detriment of the Fund and other investors.

 11
COUNT I

Violations of Section 17(a) of the Securities Act

44. Paragraphs 1 through 43 are realleged and incorporated by reference as
though fully set forth herein.
45. By engaging in the conduct described above, Defendant Nordlund, in
the offer and sale of securities, by the use of the means and instruments of
transportation or communication in interstate commerce or by use of the mails,
directly or indirectly, has (a) employed devices, schemes and artifices to defraud; (b)
obtained money and property by means of untrue statements of material fact and by
omitting to state material facts necessary to make the statements made, in light of the
circumstances under which they were made, not misleading; and (c) engaged in
transactions, practices, and courses of business which operated or would operate as a
fraud or deceit upon the purchasers of such securities.
46. Defendant Nordlund obtained money or property by means of the
scheme and the misrepresentations in the form of investments he obtained on behalf
of the Fund and compensation he collected from the Fund.
47. Defendant Nordlund acted knowingly, or with extreme recklessness, in
engaging in the scheme and the misrepresentations described above.
48. Defendant Nordlund also acted negligently in engaging in the conduct
described above.

 12
49. By engaging in the conduct described above, Defendant Nordlund
violated Section 17(a)(1), 17(a)(2) and 17(a)(3) of the Securities Act, 15 U.S.C. §§
77q(a)(1), 77q(a)(2), and 77q(a)(3).
COUNT II
Violations of Section 10(b) of the Exchange Act,
and Exchange Act Rule 10b-5
50.  Paragraphs 1 through 43 are realleged and incorporated by reference.
51.  As more fully described in paragraphs 1 through 43  , Defendant
Nordlund, in connection with the purchase and sale of securities, by the use of the
means and instrumentalities of interstate commerce and by the use of the mails,
directly and indirectly: used and employed devices, schemes and artifices to defraud;
made untrue statements of material fact and omitted to state material facts necessary
in order to make the statements made, in light of the circumstances under which they
were made, not misleading; and engaged in acts, practices and courses of business
which operated or would have operated as a fraud and deceit upon purchasers and
prospective purchasers  of securities.
52. As described in more detail in paragraphs 1 through 43 above,
Defendant Nordlund acted with scienter in that he knowingly or recklessly made the
material misrepresentations and omissions and engaged in the fraudulent scheme
identified above.

 13
53. By reason of the foregoing, Defendant Nordlund violated Section 10(b)
of the Exchange Act, 15 U.S.C. § 78j(b), and Rule 10b-5 thereunder, 17 C.F.R.
240.10b-5.
COUNT III

Violations of Sections 206(1) and 206(2) of the Advisers Act
54. Paragraphs 1 through 43 are realleged and incorporated by reference as
though fully set forth herein.
55. As detailed in paragraphs 1 through 43 above, Defendant Nordlund,
while acting as an investment adviser, and in breach of his fiduciary duty, by use of
the mails, and the means and instrumentalities of interstate commerce, directly or
indirectly, knowingly, willfully or recklessly: (i) employed devices, schemes or
artifices to defraud his clients or prospective clients; and (ii) engaged in transactions,
practices and courses of business which have operated as a fraud or deceit upon his
clients or prospective clients.
56. Defendant Nordlund, as an investment adviser, owed affirmative
fiduciary duties of loyalty, fairness and good faith to his clients, including the Fund.
These duties required Defendant Nordlund to, among other things, act in the best
interest of his clients when selecting and purchasing investments on the Fund’s
behalf, calculating the net asset value of the Fund, providing reports to investors in
the Fund, and collecting compensation from the Fund. Defendant Nordlund violated
Sections 206(1) and 206(2) and breached his fiduciary duties by manipulating the
price of Affinity Gold stock to inflate the net asset value of the Fund, using the

 14
manipulated price of Affinity Gold stock when calculating the net asset value of the
fund, providing reports to investors that inflated the net asset value of the Fund, and
using the inflated value of the Fund to pay investors and pay himself compensation.
57. Defendant Nordlund acted knowingly, or with extreme recklessness, in
engaging in the scheme and the misrepresentations described above.
58. Defendant Nordlund also acted negligently in engaging in the conduct
described above.
59. Through the foregoing, Defendant Nordlund violated Sections 206(1)
and 206(2) of the Advisers Act. 15 U.S.C. §§ 80b-6(1) and 80b-6(2).
COUNT IV
Violations of Section 206(4) of the Advisers Act and Rule 206(4)-8
60. Paragraphs 1 through 43 are realleged and incorporated by reference as
though fully set forth herein.
61. The Fund was a pooled investment vehicle for purposes of Rule 206(4)-
8, 17 C.F.R. § 275.206(4)-8.
62. Nordlund acted as an investment adviser to the Fund.
63. Nordlund (1) made untrue statements of material fact or omitted to
state material facts   necessary to make the statements made, in light of the
circumstances in which they were made, not misleading, to any investor or
prospective investor in a pooled investment vehicle, and (2) otherwise engaged in
acts, practices   or courses   of business that are fraudulent, deceptive, or manipulative
with respect to any investor or prospective investor in a pooled investment vehicle.

 15
64. Through the conduct described above, Nordlund violated Section
206(4) of the Advisers Act, 15 U.S.C. § 80b-6(4) and Rule 206(4)-8 thereunder, 17
C.F.R. § 275.206(4)-8.
RELIEF REQUESTED
 WHEREFORE, the Commission respectfully requests that this Court:
I.
 Issue findings of fact and conclusions of law that Defendant Nordlund
committed the violations charged and alleged herein.
II.
 Issue a permanent injunction restraining and enjoining Defendant Nordlund,
his officers, agents, servants, employees, attorneys and those persons in active
concert or participation with Defendant Nordlund who receive actual notice of the
order of this Court, by personal service or otherwise, and each of them from, directly
or indirectly, engaging in the transactions, acts, practices or courses of business
described above, or in conduct of similar purport and object, in violation of Section
17(a) of the Securities Act, 15 U.S.C. § 77q(a), Section 10(b) of the Exchange Act, 15
U.S.C. § 78j(b), and Rule 10b-5 thereunder, 17 C.F.R. 240.10b-5, and Section 206 of
the Advisers Act, 15 U.S.C. § 78(p)(a) and Rule 206(4)-8 thereunder, 17 C.F.R. §
275.206(4)-8.
III.
Issue an Order requiring Defendant Nordlund to disgorge the ill-gotten gains

 16
received as a result of the violations alleged in this Complaint, including prejudgment
interest pursuant to Section 21(d)(5) and 21(d)(7) of the Exchange Act, 15 U.S.C. §§
78u(d)(5), and 78u(d)(7).
IV.
 Issue an Order, pursuant to Section 21(d)(3) of the Exchange Act, 15 U.S.C. §
78u(d)(3), Section 20(d) of the Securities Act, 15 U.S.C. § 77t(d), and Section 209(e)
of the Advisers Act, 15 U.S.C. § 80b-9(e), requiring Defendant Nordlund to pay a
civil penalty.
V.
 Issue an Order enjoining Defendant Nordlund from participating in an
offering of penny stock pursuant to Section 20(g) of the Securities Act, 15 U.S.C. §
77t(g), and Section 21(d)(6) of the Exchange Act, 15 U.S.C. § 78u(d)(6).
VI.
 Issue an Order pursuant to Section 21(d)(2) of the Exchange Act, 15 U.S.C. §
78u(d)(2), prohibiting Defendant Nordlund from acting as an officer or director of
any issuer that has a class of securities registered pursuant Section 12 of the
Exchange Act, 15 U.S.C. § 78l, or that is required to file reports pursuant to Section
15(d) of the Exchange Act, 156 U.S.C. § 78o(d).
VII.
 Retain jurisdiction of this action in accordance with the principals of equity
and the Federal Rules of Civil Procedure in order to implement and carry out the

 17
terms of all orders and decrees that may be entered or to entertain any suitable
application or motion for additional relief within the jurisdiction of this Court.
VIII.
 Grant such other relief as this Court deems appropriate.

JURY DEMAND

 Pursuant to Rule 38 of the Federal Rules of Civil Procedure, the Commission
hereby requests a trial by jury.
     UNITED STATES SECURITIES
     AND EXCHANGE COMMISSION

September 29  , 2022  By: /s/ Charles J. Kerstetter
     Charles J. Kerstetter ([email protected])
Peter Senechalle ([email protected])
Sarah E. Hancur ([email protected])
     Daniel J. Hayes ([email protected])
     Chicago Regional Office
     175 West Jackson Blvd., Suite 1450
     Chicago, IL 60604
         Telephone: (312) 353-7390

Attorneys for Plaintiff

UNITED STATES DISTRICT COURT FOR THE 
DISTRICT OF MINNESOTA 

__________________________________________ 
       : 
UNITED STATES SECURITIES  : 
AND EXCHANGE COMMISSION,  : 
       :    
   Plaintiff,   : 
       :          CASE NO. 22-cv-2406 
  v.     :  
       :  
JASON NORDLUND,    : JURY DEMANDED 
       : 
   Defendant.   : 
       :  
_________________________________________ :   
 

COMPLAINT 
 

 Plaintiff United States Securities and Exchange Commission (the “SEC” or 

“Commission”) alleges as follows: 

1. Between at least August and December 2020, Defendant Jason 

Nordlund orchestrated a fraudulent scheme to inflate the value of a private hedge 

fund he managed, Norstar F&F Capital, LLC (the “Fund”) by manipulating the 

price of the stock of Affinity Gold Corporation (“Affinity Gold”), which was one of 

the Fund’s largest holdings.  

2. Nordlund effectuated his fraudulent scheme by manipulating the price 

of Affinity Gold stock on an ongoing basis and then “marking the close,” a practice 

in which a trader seeks to drive up the closing price of a stock by placing multiple 

buy orders at or near the close of the trading day or the end of the month. 

Specifically, Nordlund funneled money from the Fund to a bank account held by a 

CASE 0:22-cv-02406   Doc. 1   Filed 09/29/22   Page 1 of 17



 2 

friend (Nordlund’s “Friend”). Nordlund then instructed his Friend to place limit 

orders to buy Affinity Gold stock, typically at prices above the then-quoted price for 

the stock. Based on these instructions, Nordlund’s Friend purchased Affinity Gold 

stock more than 100 times between August and December 2020, typically in small 

quantities.  

3. During this period, the Friend’s orders often set the high price for the 

day, were above the day’s opening prices, and were above prices being paid by other 

traders on the day. Toward the end of the month, when Nordlund would report 

account balances to the Fund’s investors, the Friend’s orders increased in frequency 

and size. As a result of these manipulative orders, the price of Affinity Gold stock 

jumped significantly on the last trading day in September, October and November 

2020.  

4. As Nordlund knew, his manipulation of Affinity Gold stock had the 

effect of artificially inflating the value of the stock and, in turn, the net asset value of 

the Fund and the value of each investor’s share of the Fund. Nordlund then reported 

these inflated account balances to his investors in emails Nordlund sent to the 

investors reporting the value of their personal investments in the Fund. These reports 

did not disclose that the value of the Fund’s holdings of Affinity Gold stock were 

inflated or Nordlund’s role in manipulating the value of the stock. In addition to 

including the inflated performance values in monthly emails to existing investors, 

Nordlund referenced the inflated performance values in statements to prospective 

investors. Given that Affinity Gold accounted for approximately 20% of the Fund’s 

CASE 0:22-cv-02406   Doc. 1   Filed 09/29/22   Page 2 of 17



 3 

holdings, information about its inflated value and the consequent effect on the 

Fund’s value, was important to investors.   

5.  Nordlund’s manipulation of Affinity Gold stock and the resulting 

impact on the value of the Fund harmed investors in several ways. First, Nordlund 

used the inflated value of the Fund when soliciting new investments, without 

disclosing to these prospective investors his involvement in manipulating the price of 

Affinity Gold stock. Second, and relatedly, new investors in the Fund during this 

period paid higher prices due to the inflated value of the Fund. Third, because 

Nordlund’s compensation was based on the Fund’s value, he received greater value 

than he was entitled to receive to the detriment of the Fund and other investors.  

6. Based on the conduct above, Nordlund engaged in a fraudulent scheme 

to manipulate the price of Affinity Gold stock and artificially inflate the value of the 

Fund, and also made false statements and misleading omissions to existing and 

prospective Fund investors about the impact of his manipulation on the Fund’s value 

in violation of Section 17(a) of the Securities Act of 1933 (“Securities Act”), 15 

U.S.C. § 77q(a), Section 10(b) of the Securities Exchange Act of 1934 (the 

“Exchange Act”), 15 U.S.C. § 78j(b), and Rule 10b-5 thereunder, 17 C.F.R. 240.10b-

5, and Section 206 of the Investment Advisers Act of 1940 (“Advisers Act”), 15 

U.S.C. § 78(p)(a) and Rule 206(4)-8 thereunder, 17 CFR § 275.206(4)-8. 

7. Unless Defendant Nordlund is permanently restrained and enjoined, he 

will continue to engage in the acts, practices, and courses of business set forth in this 

Complaint, and in acts, practices and courses of business of similar type and object.  

CASE 0:22-cv-02406   Doc. 1   Filed 09/29/22   Page 3 of 17



 4 

JURISDICTION AND VENUE 

8. The SEC brings this action under Section 20(b) and (d) of the Securities 

Act, 15 U.S.C. § 77t(b) & (d), Sections 21(d) and (e) of the Exchange Act, 15 U.S.C. 

§§ 78u(d) and 78u(e), and Sections 209(d) and (e) of the Advisers Act, 15 U.S.C. § 

80b-9(d)-(e). 

9. This Court has jurisdiction over this action under Section 22(a) of the 

Securities Act, 15 U.S.C. § 77v(a), Section 27(a) of the Exchange Act, 15 U.S.C. § 

78aa(a), and Section 214 of the Advisers Act, 15 U.S.C. § 80b-14, and 28 U.S.C. § 

1331. 

10. Venue is proper in this Court pursuant to Section 22(a) of the Securities 

Act, 15 U.S.C. § 77v(a), Section 27(a) of the Exchange Act, 15 U.S.C. § 78aa(a) and 

Section 214(a) of the Advisers Act. The Defendant is an inhabitant of, is found in, 

and transacts business in the District of Minnesota, and many of the acts and 

transactions constituting the violations alleged in this Complaint occurred within the 

District of Minnesota. 

11. Defendant Nordlund directly and indirectly made use of the means or 

instruments of transportation or communication in interstate commerce, or the 

means and instrumentalities of interstate commerce, or of the mails, or of any facility 

of any national securities exchange in connection with the acts, practices, and 

courses of business alleged herein.  

 

 

CASE 0:22-cv-02406   Doc. 1   Filed 09/29/22   Page 4 of 17



 5 

DEFENDANT 

12. Jason Nordlund, age 44, lives in Minneapolis, Minnesota and is the 

CEO and principal of several investment related companies, including Norstar 

Capital LLC (“Norstar Management”) and the Fund. From September 2017 to 

February 2021, Nordlund was a member of Affinity Gold’s board of directors and 

served as its investor relations manager. He owned, and still owns, a significant 

number of shares of Affinity Gold stock.  

RELATED ENTITIES 

13. The Fund is an open-ended, multi-member private investment fund 

based in Minneapolis, Minnesota. The Fund is managed by Norstar Management, a 

Minnesota limited liability company, formerly known as Norstar Wealth 

Management LLC, which is owned and controlled by Nordlund. The Fund invests 

in a variety of investments selected by Nordlund, including stocks, private 

placements, and precious metals. During the relevant period, the Fund had 

approximately 45 investors and approximately $800,000 in assets.  

14. Affinity Gold is a Nevada corporation, headquartered in Maple Grove, 

Minnesota. Affinity Gold was formed in 2007 and purports to be a metal and 

mineral mining company. It is a penny stock company and its common stock was 

quoted on OTC Link until September 2021 and traded under the ticker “AFYG.” 

Affinity Gold has never had a class of securities registered under the Exchange Act. 

Beginning in 2007 Affinity Gold became obligated to file reports pursuant to 

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Exchange Act Section 15(d), but that duty to file is currently suspended due to a very 

small number of holders of record. Affinity Gold’s website has not been updated 

since 2014. 

FACTS 

15. Defendant Nordlund is an entrepreneur and investor. Defendant 

Nordlund created the Fund in approximately July 2020 after receiving requests from 

his friends and family for help with their investments.  

16. The Fund was managed by Norstar Management, Nordlund’s entity, 

and Nordlund made all investment decisions for the Fund.  

17. During the relevant time, the Fund had approximately 45 investors and 

assets of approximately $800,000.  

18. Norstar Management and, in turn, Nordlund, received compensation 

for managing the Fund by collecting a fee when investors redeemed their shares of 

the Fund, equal to 50% of the value in excess of the investor’s capital contribution, 

rather than charging a periodic fee based on the Fund’s assets.  

19. Because the Fund was “open-ended,” Nordlund was permitted to, and 

occasionally did, solicit new investors to purchase interests in the Fund. New shares 

in the Fund were sold at a price based on the net asset value of the Fund divided by 

the number of outstanding shares in the Fund. 

Nordlund Purchased Affinity Gold Stock for the Fund 

20. One of the first investments Nordlund made on the Fund’s behalf was 

in the stock of Affinity Gold. Between approximately July and August 2020, 

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Nordlund caused the Fund to purchase more than 4.1 million shares of Affinity 

Gold. At all relevant times, Affinity Gold represented, on average, 20% of the Fund’s 

holdings and was one of its largest investments.  

21. Affinity Gold’s stock was thinly traded during the relevant period. The 

average daily volume of trading in Affinity Gold during the first half of 2020 was 

approximately 26,917 shares traded per day. Nordlund was aware of this fact at the 

time he purchased Affinity Gold stock for the Fund.  

22. The low volume of trading in Affinity Gold stock resulted in a large 

spread between the bid price and the ask price for Affinity Gold stock, which in turn 

led to volatility in the stock price.  

23. In or around August 2020, Nordlund became aware that the volatility 

in the price of Affinity Gold stock was causing the net asset value of the Fund to 

fluctuate significantly. 

24. Nordlund, who tracked the Fund’s performance on a weekly basis, 

became “uncomfortable that [the stock price of Affinity Gold] had the ability to . . . 

draw . . . down significantly” the value of the Fund.  

Nordlund’s Strategy to Manipulate the Price of Affinity Gold Stock 

25. To prevent fluctuations in the Fund’s value, Nordlund implemented a 

coordinated but undisclosed trading strategy to “stabilize the price” of Affinity Gold 

stock.  

26. In or around August 2020, Nordlund asked his Friend to help “stabilize 

that price and just keep it consistent with where the majority of the trading was 

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occurring.” Nordlund then transferred $20,000 from the Fund to a bank account that 

his Friend could access.  

27. When Nordlund wanted his Friend to purchase stock, he would contact 

the Friend and ask him to place a limit order for Affinity Gold stock. Nordlund’s 

Friend would then enter the orders in a personal brokerage account held in the 

Friend’s name.  

28. Nordlund’s Friend typically purchased relatively small quantities of 

Affinity Gold stock using limit orders set above the price at which Affinity Gold 

stock was trading at the time. Between August and December 2020, Nordlund’s 

Friend purchased Affinity Gold stock more than 100 times. 

29. The orders Nordlund’s Friend placed on Nordlund’s behalf often set the 

high price for Affinity Gold stock on the particular trading day. The orders were 

frequently set higher than the opening price of Affinity Gold stock and at high prices 

despite concurrent trading by other traders at lower prices.  

30. Nordlund’s Friend’s stock purchases increased in frequency and size at 

the end of each month. Consequently, the price of Affinity Gold stock increased 

significantly on the last trading day in September, October and November 2020.  

Nordlund Reported Inflated Performance Values to New and Existing Investors 

31. Nordlund’s month-end marking the close of Affinity Gold stock inflated 

the value of the Fund’s position in Affinity Gold between 13% and 99% on the last 

day of the month in September, October and November 2020. Because Affinity Gold 

stock was one of the Fund’s largest holdings, Nordlund’s month-end marking the 

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close impacted the Fund’s monthly performance by artificially propping up the 

Fund’s value.  

32. Nordlund knew that his marking of the close artificially inflated the 

price of Affinity Gold’s stock and, in turn, the value of the Fund.  

33. Each month, Nordlund provided Fund investors with an email 

reflecting the balance of their portion of the Fund’s equity. Nordlund also drafted 

and distributed to investors monthly newsletters summarizing the Fund’s 

performance in the previous month.  

34. In emails Nordlund sent to Fund investors, Nordlund did not disclose 

that the monthly performance figures were inflated by his manipulation of the price 

of Affinity Gold stock.   

35. After manipulating the stock and inflating the Fund’s value, Nordlund 

continued to sell shares of the Fund to investors.   

36. Nordlund occasionally provided these prospective investors with 

monthly performance figures to demonstrate his success and solicit new investments. 

Nordlund did not disclose to these prospective investors that the Fund’s performance 

figures were artificially inflated as a result of his manipulation of Affinity Gold stock. 

37. For example, On September 1, 2020, Nordlund forwarded one 

prospective investor an email Nordlund had sent to an existing investor showing a 

balance of $130,196. Nordlund wrote that the existing investor had “started with 

exactly $39.5k 12 weeks ago.” Less than a month after receiving this email, the 

prospective investor invested $7,000 in the Fund. 

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38. Given that Affinity Gold represented approximately 20% of the Fund’s 

portfolio, information about Nordlund’s manipulation of the stock price and the 

resulting impact on the Fund’s net asset value, would have been important to 

investors.  

39. In addition, when Nordlund sold shares of the Fund to these new 

investors, the purchase price was based on the net asset value of the Fund divided by 

all outstanding shares. Because the value of the Fund was inflated as a result of the 

manipulation of Affinity Gold stock, the shares of the Fund sold at this time were 

also inflated in value. 

40. At the time he sold shares to new investors, Nordlund knew that the 

value of the Fund, and thus the price of the new shares in the Fund, had been 

inflated by his manipulation of Affinity Gold stock.  

41. These investors would have considered it important to know that they 

were paying a higher price for their interests in the Fund as a result of Nordlund’s 

manipulation of the price of Affinity Gold stock.  

42. Similarly, as alleged in Paragraph 18, Nordlund’s compensation was 

based on the value of the Fund. In other words, any increase in the value of the Fund 

had the effect of increasing Nordlund’s compensation.  

43. By inflating the value of the Fund, Nordlund, and the investors who 

redeemed profits at this time, received greater value than they were entitled to 

receive, to the detriment of the Fund and other investors.  

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COUNT I 
 

Violations of Section 17(a) of the Securities Act 
 

44. Paragraphs 1 through 43 are realleged and incorporated by reference as 

though fully set forth herein. 

45. By engaging in the conduct described above, Defendant Nordlund, in 

the offer and sale of securities, by the use of the means and instruments of 

transportation or communication in interstate commerce or by use of the mails, 

directly or indirectly, has (a) employed devices, schemes and artifices to defraud; (b) 

obtained money and property by means of untrue statements of material fact and by 

omitting to state material facts necessary to make the statements made, in light of the 

circumstances under which they were made, not misleading; and (c) engaged in 

transactions, practices, and courses of business which operated or would operate as a 

fraud or deceit upon the purchasers of such securities. 

46. Defendant Nordlund obtained money or property by means of the 

scheme and the misrepresentations in the form of investments he obtained on behalf 

of the Fund and compensation he collected from the Fund. 

47. Defendant Nordlund acted knowingly, or with extreme recklessness, in 

engaging in the scheme and the misrepresentations described above.  

48. Defendant Nordlund also acted negligently in engaging in the conduct 

described above.  

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49. By engaging in the conduct described above, Defendant Nordlund 

violated Section 17(a)(1), 17(a)(2) and 17(a)(3) of the Securities Act, 15 U.S.C. §§ 

77q(a)(1), 77q(a)(2), and 77q(a)(3).  

COUNT II 

Violations of Section 10(b) of the Exchange Act, 
and Exchange Act Rule 10b-5 

50.  Paragraphs 1 through 43 are realleged and incorporated by reference. 

51.  As more fully described in paragraphs 1 through 43, Defendant 

Nordlund, in connection with the purchase and sale of securities, by the use of the 

means and instrumentalities of interstate commerce and by the use of the mails, 

directly and indirectly: used and employed devices, schemes and artifices to defraud; 

made untrue statements of material fact and omitted to state material facts necessary 

in order to make the statements made, in light of the circumstances under which they 

were made, not misleading; and engaged in acts, practices and courses of business 

which operated or would have operated as a fraud and deceit upon purchasers and 

prospective purchasers  of securities. 

52. As described in more detail in paragraphs 1 through 43 above, 

Defendant Nordlund acted with scienter in that he knowingly or recklessly made the 

material misrepresentations and omissions and engaged in the fraudulent scheme 

identified above. 

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53. By reason of the foregoing, Defendant Nordlund violated Section 10(b) 

of the Exchange Act, 15 U.S.C. § 78j(b), and Rule 10b-5 thereunder, 17 C.F.R. 

240.10b-5.  

COUNT III 
 

Violations of Sections 206(1) and 206(2) of the Advisers Act 

54. Paragraphs 1 through 43 are realleged and incorporated by reference as 

though fully set forth herein. 

55. As detailed in paragraphs 1 through 43 above, Defendant Nordlund, 

while acting as an investment adviser, and in breach of his fiduciary duty, by use of 

the mails, and the means and instrumentalities of interstate commerce, directly or 

indirectly, knowingly, willfully or recklessly: (i) employed devices, schemes or 

artifices to defraud his clients or prospective clients; and (ii) engaged in transactions, 

practices and courses of business which have operated as a fraud or deceit upon his 

clients or prospective clients. 

56. Defendant Nordlund, as an investment adviser, owed affirmative 

fiduciary duties of loyalty, fairness and good faith to his clients, including the Fund. 

These duties required Defendant Nordlund to, among other things, act in the best 

interest of his clients when selecting and purchasing investments on the Fund’s 

behalf, calculating the net asset value of the Fund, providing reports to investors in 

the Fund, and collecting compensation from the Fund. Defendant Nordlund violated 

Sections 206(1) and 206(2) and breached his fiduciary duties by manipulating the 

price of Affinity Gold stock to inflate the net asset value of the Fund, using the 

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manipulated price of Affinity Gold stock when calculating the net asset value of the 

fund, providing reports to investors that inflated the net asset value of the Fund, and 

using the inflated value of the Fund to pay investors and pay himself compensation.  

57. Defendant Nordlund acted knowingly, or with extreme recklessness, in 

engaging in the scheme and the misrepresentations described above.  

58. Defendant Nordlund also acted negligently in engaging in the conduct 

described above. 

59. Through the foregoing, Defendant Nordlund violated Sections 206(1) 

and 206(2) of the Advisers Act. 15 U.S.C. §§ 80b-6(1) and 80b-6(2).  

COUNT IV 

Violations of Section 206(4) of the Advisers Act and Rule 206(4)-8 

60. Paragraphs 1 through 43 are realleged and incorporated by reference as 

though fully set forth herein. 

61. The Fund was a pooled investment vehicle for purposes of Rule 206(4)-

8, 17 C.F.R. § 275.206(4)-8. 

62. Nordlund acted as an investment adviser to the Fund. 

63. Nordlund (1) made untrue statements of material fact or omitted to 

state material facts necessary to make the statements made, in light of the 

circumstances in which they were made, not misleading, to any investor or 

prospective investor in a pooled investment vehicle, and (2) otherwise engaged in 

acts, practices or courses of business that are fraudulent, deceptive, or manipulative 

with respect to any investor or prospective investor in a pooled investment vehicle.  

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64. Through the conduct described above, Nordlund violated Section 

206(4) of the Advisers Act, 15 U.S.C. § 80b-6(4) and Rule 206(4)-8 thereunder, 17 

C.F.R. § 275.206(4)-8.  

RELIEF REQUESTED 

 WHEREFORE, the Commission respectfully requests that this Court: 

I.  

 Issue findings of fact and conclusions of law that Defendant Nordlund 

committed the violations charged and alleged herein. 

II.  

 Issue a permanent injunction restraining and enjoining Defendant Nordlund, 

his officers, agents, servants, employees, attorneys and those persons in active 

concert or participation with Defendant Nordlund who receive actual notice of the 

order of this Court, by personal service or otherwise, and each of them from, directly 

or indirectly, engaging in the transactions, acts, practices or courses of business 

described above, or in conduct of similar purport and object, in violation of Section 

17(a) of the Securities Act, 15 U.S.C. § 77q(a), Section 10(b) of the Exchange Act, 15 

U.S.C. § 78j(b), and Rule 10b-5 thereunder, 17 C.F.R. 240.10b-5, and Section 206 of 

the Advisers Act, 15 U.S.C. § 78(p)(a) and Rule 206(4)-8 thereunder, 17 C.F.R. § 

275.206(4)-8.   

III. 

Issue an Order requiring Defendant Nordlund to disgorge the ill-gotten gains 

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received as a result of the violations alleged in this Complaint, including prejudgment 

interest pursuant to Section 21(d)(5) and 21(d)(7) of the Exchange Act, 15 U.S.C. §§ 

78u(d)(5), and 78u(d)(7). 

IV. 

 Issue an Order, pursuant to Section 21(d)(3) of the Exchange Act, 15 U.S.C. § 

78u(d)(3), Section 20(d) of the Securities Act, 15 U.S.C. § 77t(d), and Section 209(e) 

of the Advisers Act, 15 U.S.C. § 80b-9(e), requiring Defendant Nordlund to pay a 

civil penalty.  

V. 

 Issue an Order enjoining Defendant Nordlund from participating in an 

offering of penny stock pursuant to Section 20(g) of the Securities Act, 15 U.S.C. § 

77t(g), and Section 21(d)(6) of the Exchange Act, 15 U.S.C. § 78u(d)(6).  

VI. 

 Issue an Order pursuant to Section 21(d)(2) of the Exchange Act, 15 U.S.C. § 

78u(d)(2), prohibiting Defendant Nordlund from acting as an officer or director of 

any issuer that has a class of securities registered pursuant Section 12 of the 

Exchange Act, 15 U.S.C. § 78l, or that is required to file reports pursuant to Section 

15(d) of the Exchange Act, 156 U.S.C. § 78o(d). 

VII. 

 Retain jurisdiction of this action in accordance with the principals of equity 

and the Federal Rules of Civil Procedure in order to implement and carry out the 

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terms of all orders and decrees that may be entered or to entertain any suitable 

application or motion for additional relief within the jurisdiction of this Court. 

VIII. 

 Grant such other relief as this Court deems appropriate. 
 

JURY DEMAND 
 

 Pursuant to Rule 38 of the Federal Rules of Civil Procedure, the Commission 

hereby requests a trial by jury.  

     UNITED STATES SECURITIES 
     AND EXCHANGE COMMISSION 
 
September 29, 2022  By: /s/ Charles J. Kerstetter 
     Charles J. Kerstetter ([email protected]) 

Peter Senechalle ([email protected]) 
Sarah E. Hancur ([email protected]) 

     Daniel J. Hayes ([email protected]) 
     Chicago Regional Office 
     175 West Jackson Blvd., Suite 1450 
     Chicago, IL 60604 
      Telephone: (312) 353-7390 
 

Attorneys for Plaintiff 

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