Applicant, the United States Securities and Exchange Commission

1
UNITED STATES DISTRICT COURT
FOR THE DISTRICT OF MINNESOTA
UNITED STATES SECURITIES  )
AND EXCHANGE COMMISSION, )
)
Applicant, )
)
v. ) Case No:
)
COREY J. SANDBERG, and )
AFFINITY GOLD CORPORATION, )  Judge
)
Respondents. )
U.S. SECURIT
IES AND EXCHANGE COMMISSION’S
APPLICATION FOR AN ORDER COMPELLING
COMPLIANCE WITH ADMINISTRATIVE SUBPOENAS
Applicant, the United States Securities and Exchange Commission
(“Commission”), respectfully moves this Court, pursuant to Section 22(b) of the
Securities Act of 1933, 15 U.S.C § 77v(b), and Section 21(c) of the Securities and
Exchange Act of 1934, 15 U.S.C. § 78u(c), to enter an Order compelling Corey J.
Sandberg (“Mr. Sandberg”) to comply with administrative subpoenas issued by the
Commission requiring him to produce  documents on his own behalf and on behalf of
Affinity Gold Corporation (“Affinity Gold” or the “Company”) as the Company’s Chief
Executive Officer.
I.INTRODUCTION
This Application seeks to enforce document production subpoenas issued to and
served upon Corey J. Sandberg and Affinity Gold pursuant to an Order Directing Private
Investigation and Designating Officers to Take Testimony in the investigation captioned
 17-mc-00062

2

In the Matter of Affinity Gold Corp. (Internal File No. C-08405) (“the Affinity Gold
Investigation”). The staff of the Commission (the “Staff”) issued subpoenas to Mr.
Sandberg and to Affinity Gold, care of Mr. Sandberg as the Company’s Chief Executive
Officer, on March 13, 2017 and July 7, 2017 (collectively, the “Subpoenas”) requesting
the production of certain documents. While Mr. Sandberg did produce some documents
to the Staff, he has withheld many other documents that are responsive to the Subpoenas
and material to the Staff’s investigation. The Staff has contacted Mr. Sandberg repeatedly
in attempts to secure these withheld documents. Mr. Sandberg has neither produced the
documents nor provided the Staff with a reason why the documents are properly
withheld.
The Commission has made no prior application to any court for similar relief and
now seeks the aid of this Court by means of a summary proceeding. All attempts to
obtain voluntary compliance with the Subpoenas have failed. A summary proceeding is
necessary so that the Staff may complete its investigation expeditiously. As set forth
below, the Commission has met all of the requirements for judicial enforcement of its
Subpoenas and, therefore, respectfully requests the Court to enter an order compelling
Mr. Sandberg to produce documents.
II. STATEMENT OF FACTS
A. Corey J. Sandberg
Respondent Corey J. Sandberg is a U.S. citizen who resides in Maple Grove,
Minnesota. Mr. Sandberg is the Chief Executive Officer of Affinity Gold.  (Javorski
Decl. ¶¶ 7-8). According to documents produced to the Commission, Affinity Gold is a

3

mining company in the business of acquiring and developing mineral mining projects.
Affinity Gold purports to conduct such business in Peru and Colombia. (Id. at ¶ 8).
B. The Commission’s Investigation
On March 6, 2017, the Commission issued an Order Directing Private
Investigation and Designating Officers to Take Testimony in the Affinity Gold
Investigation (the “Formal Order”).
1
 (Javorski Decl. ¶ 5). The Formal Order authorizes
the Staff to investigate whether any persons have engaged, are engaging or will engage in
violations of Section 17(a) of the Securities Act of 1933 (“Securities Act”) and Section
10(b) of the Securities Exchange Act of 1934 (“Exchange Act”) and Rule 10b-5
thereunder, by various acts and practices reported in the Formal Order or by any act or
practice of similar purport or object. (Id. at ¶ 6). The Formal Order empowers the Staff to,
among other things, subpoena witnesses and require parties to produce documents. (Id. at
¶ 6).
C. Mr. Sandberg’s Failure to Provide Documents as Required by the
Commission’s Subpoenas

Pursuant to the Formal Order, the Staff issued subpoenas on March 13, 2017 and
July 7, 2017 requiring Mr. Sandberg to produce certain documents to the Commission.
(Javorski Decl. ¶¶ 10, 17). Mr. Sandberg has yet to fulfill his obligations under these
Subpoenas.

1
 The Commission is willing to provide the Court with a copy of the Formal Order, but
respectfully requests an in camera review because the Commission’s investigation is
non-public and ongoing.

4

On March 13, 2017, the Staff issued two subpoenas for documents relevant to
Affinity Gold’s business; the first was issued to Mr. Sandberg, the second issued to
Affinity Gold care of Mr. Sandberg. (Javorski Decl. ¶ 10). Both subpoenas called for the
production of, among other things, communications with investors or potential investors,
documents relevant to Affinity Gold’s mining projects, and the identity of Affinity
Gold’s investors and individuals who communicated with those investors on Affinity
Gold’s behalf. Mr. Sandberg’s response to both subpoenas was initially due on March 28,
2017. (Id. at ¶ 10). The Staff was able to communicate with Mr. Sandberg on April 13,
2017 and extended the due date to April 28, 2017. (Id. at ¶ 12). On this new due date, Mr.
Sandberg emailed the Staff claiming that messages he sent the Staff the previous day
were undeliverable. (Id. at ¶ 13). Mr. Sandberg’s April 28, 2017 email attached twenty
business emails in PDF form. (Id. at ¶ 14). The Staff provided Mr. Sandberg with a link
to a file transfer website to facilitate production of the remainder of the documents under
subpoena. (Id. at ¶ 15). Mr. Sandberg failed to produce any additional documents
responsive to the Commission’s subpoenas. On May 19, 2017, the Staff notified Mr.
Sandberg that his testimony would be required in this matter, and if he failed to produce
all responsive documents by May 26, 2017, additional testimony may be necessary. (Id.
at   ¶ 16).
On July 7, 2017, the Staff received a returned, unopened package containing its
March 13, 2017 subpoena directed to Affinity Gold care of Mr. Sandberg. On the same
day, the Staff issued a new subpoena for the same documents to be produced by July 14,

5

2017. (Javorski Decl. ¶ 17). Neither Mr. Sandberg nor Affinity Gold has produced any
documents responsive to this subpoena.
On July 27, 2017, pursuant to a Commission subpoena, Mr. Sandberg gave sworn
testimony. During testimony, Mr. Sandberg admitted that he has not produced all
documents responsive to the Subpoenas:
A:  ... Because, to be honest, I’m embarrassed but concerned that I haven’t
provided all the documents to you yet, so –

(Javorski Decl., Exh. 8 at 12:18-20).
Q:  ... Have you produced all documents relevant or responsive to these 11
requests?
A: No.
Q: No, you haven’t?
A: Not all of them, no.
(Id. at 16:6-10).
A: ... I’m not done in this process of searching and finding and producing them
for you.
Q: Okay.
A: There are more to produce.

 (Id. at 17:9-13).
After Mr. Sandberg’s sworn testimony, the Staff contacted Mr. Sandberg to
remind him to produce the requested documents and to help him with the technical tools
to do so. Specifically, on August 2, 2017, the Staff provided Mr. Sandberg step-by-step
instructions on how to properly export and produce relevant email files and metadata.
(Javorski Decl. ¶ 21). On August 25, 2017, the Staff forwarded these instructions again to
Mr. Sandberg. (Id.).

6

On October 6, 2017, having not received any additional documents from Mr.
Sandberg, Staff wrote in a letter to Mr. Sandberg, “[a]s we have repeatedly informed you,
and as you acknowledged in your testimony on July 27, 2017, you have not fulfilled your
obligation to produce all documents requested in [the Subpoenas].” (Javorski Decl. ¶ 22).
In the same letter, the Staff stated, “[w]e must receive all documents responsive to the
subpoenas issued to you and Affinity Gold Corporation as soon as possible. If we do not
hear from you before October 13, 2017, we will begin preparing a subpoena enforcement
action against both you and Affinity Gold Corporation to be filed in federal court.” (Id. at
¶ 22).
As of December 11, 2017, Mr. Sandberg has not produced any documents to the
Commission other than the documents included in his initial production on April 28,
2017. (Javorski Decl. ¶ 23).
III. ARGUMENT
A. This Court May Resolve This Matter Through a Summary Proceeding.
The Commission may seek an order requiring compliance with a subpoena upon
application because subpoena enforcement proceedings are generally summary in nature.
See United States v. McDonnell Douglas Corp., 751 F.2d 220, 229 (8th Cir. 1984); see
also EEOC v. Tempel Steel Co., 814 F.2d 482, 485 (7th Cir. 1987) (subpoena
enforcement proceedings “are designed to be summary in nature”); SEC v. Sprecher, 594
F.2d 317, 320 (2d Cir. 1979). “Questions concerning agency subpoenas should be
promptly determined so that subpoenas, if valid, may be speedily enforced.” SEC v. First
Security Bank, 447 F.2d 166, 168 (10th Cir. 1971) (citing United States v. Davey, 426

7

F.2d 842, 845 (2d Cir. 1970).
Furthermore, jurisdiction to resolve this matter properly lies with this Court.
Section 22(b) of the Securities Act and Section 21(c) of the Exchange Act authorize the
Commission to seek, and any federal court to issue, an order compelling compliance with
Commission subpoenas upon application by the Commission. See 15 U.S.C. §§ 77v(b),
78u(c). More specifically, Section 21(c) of the Exchange Act provides that “the
Commission may invoke the aid of any court of the United States within the jurisdiction
of which such investigation or proceeding is carried on, or where such person resides or
carries on business, in requiring ... the production of books, papers, correspondence,
memoranda, and other records.” 15 U.S.C. § 78u(c). Since Mr. Sandberg resides in
Minnesota, gave testimony there, and conducts business there, jurisdiction and venue
properly lie within the District of Minnesota. Id.
B. The Commission Meets the Requirements for Judicial Enforcement of
the Subpoenas.

A district court is bound to enforce an administrative subpoena if the information
sought “[1] is within the authority of the agency, [2] the demand is not too indefinite and
[3] the information sought is reasonably relevant.” United States v. Morton Salt Co., 338
U.S. 632, 652 (1950); see also SEC v. Arthur Young & Co., 584 F.2d 1018, 1021 (D.C.
Cir. 1978). “An affidavit from a government official is sufficient to establish a prima
facie showing that these requirements have been met.” In re McVane, 44 F.3d 1127, 1136
(2d Cir. 1995). Here, because the Commission has met these criteria, and Mr. Sandberg
cannot show unreasonableness, the Court should enforce the Subpoenas.

8

Congress has authorized the Commission to conduct investigations in its discretion
to determine whether any person has violated, is violating, or is about to violate the
provisions of the federal securities laws. See 15 U.S.C. §§ 77t(a), 78u(a)(1). In order to
carry out this task, Congress endowed the Commission with broad investigatory powers.
See Arthur Young & Co., 584 F.2d 1018, 1023 (D.C. Cir. 1978); see also Commodity
Futures Trading Commission v. Tokheim, 153 F.3d 474, 477 (7th Cir. 1998) (quoting
United States v. Morton Salt Co., 338 U.S. 632, 642-43 (1950)) (stating that the
Commission can “investigate merely on suspicion that the law is being violated, or even
just because it wants assurance that is not”). Those investigatory powers include the
ability to subpoena witnesses and require the production of documents that the
Commission deems relevant to its investigation. See 15 U.S.C. §§ 77s(c), 78u(b).
Pursuant to the statutes cited above, the Commission issued a Formal Order to
conduct the Affinity Gold Investigation. The Formal Order states that the investigation’s
purpose is to determine, among other things, whether Affinity Gold and others violated
the anti-fraud provisions of the federal securities laws. The Subpoenas served upon Mr.
Sandberg were issued pursuant to that Formal Order and, therefore, are consistent with
the Commission’s administrative procedures.
The information sought from Mr. Sandberg is relevant and not indefinite. The
Commission is only required to make a minimal showing of relevance. As long as the
evidence sought is not plainly irrelevant to any lawful purpose, the Subpoenas should be
enforced. Arthur Young & Co., 584 F.2d at 1029. It is the burden of the opposing party to
establish that the subpoena is unreasonable. See SEC v. Blackfoot Bituminous, Inc., 622

9

F.2d 512, 515 (10th Cir. 1980); SEC v. Brigadoon Scotch Distrib. Co., 480 F.2d 1047,
1056 (2d Cir. 1973). That burden, however, is “not easily met” when the Commission’s
inquiry is legally authorized and the information is relevant to the inquiry. Brigadoon
Scotch, 480 F.2d at 1056.
In this case, the documents sought are relevant to the Commission’s investigation.
Mr. Sandberg has taken investments based on representations that may have been
materially incomplete. The Commission needs the requested documents in order to
determine whether the money Mr. Sandberg raised to fund his mining operations was
procured as part of a fraudulent scheme or other violation of the federal securities laws.
Obtaining Mr. Sandberg’s documents will help the Staff complete its inquiry.
The scope of the Commission’s production request is not overly broad or
otherwise unreasonable. Mr. Sandberg has not objected to the Subpoenas. During his
testimony, Mr. Sandberg did not provide the Staff with any reasons why he could not
produce the documents under subpoena. Mr. Sandberg has now had more than eight
months to comply with the document requests. The Staff has repeatedly informed him
that, if he did not comply voluntarily, the Staff would have to bring a subpoena
enforcement proceeding. It is clear that Mr. Sandberg has chosen not to comply with the
Commission’s Subpoenas and, as a result, the Commission has no other remedy than
judicial enforcement of the Subpoenas.
WHEREFORE,   the   United   States   Securities   and   Exchange   Commission
respectfully requests that this Court issue an Order:

A.
Directing Corey J.
Sandberg and Affinity Gold
Corporation to produce to
the Commission
Staff all  documents
responsive
to
the Commission's
Subpoenas;
B. Granting the
Commission
such other
and
further relief as may be
necessary
and
appropriate to
achieve compliance with
the Subpoenas and with any
Order the Court issues
in its enforcement
thereof; and
C.
Permitting
service of
all
Orders
on Mr. Sandberg by overnight express
mail
or
electronic mail.
Dated:
December 11, 2017
Respectfully submitted,
Charles J.
Kerstetter (PA No. 67088)
Bradley N. Lewis
(IL
No. 6297027)
United States
Securities and Exchange
Commission
175 West
Jackson Boulevard, Suite 1450
Chicago,
Illinois 60604
Telephone: (312) 596-6008
[email protected]
Attorneys for Plaintiff
Craig Baune (331727)
Assistant United States Attorney
District of
Minnesota
600 U.S.
Courthouse
300 South
Fourth Street
Minneapolis, MN
55414
Telephone: (612) 664-5600
Craig.B aune @usdoj . gov
Local Counsel
to

1 

UNITED STATES DISTRICT COURT 
FOR THE DISTRICT OF MINNESOTA 

UNITED STATES SECURITIES  ) 
AND EXCHANGE COMMISSION, )

)
Applicant, )

)
v. ) Case No: 

) 
COREY J. SANDBERG, and ) 
AFFINITY GOLD CORPORATION, )  Judge  

) 
Respondents. ) 

U.S. SECURITIES AND EXCHANGE COMMISSION’S  
APPLICATION FOR AN ORDER COMPELLING  

COMPLIANCE WITH ADMINISTRATIVE SUBPOENAS 

Applicant, the United States Securities and Exchange Commission 

(“Commission”), respectfully moves this Court, pursuant to Section 22(b) of the 

Securities Act of 1933, 15 U.S.C § 77v(b), and Section 21(c) of the Securities and 

Exchange Act of 1934, 15 U.S.C. § 78u(c), to enter an Order compelling Corey J. 

Sandberg (“Mr. Sandberg”) to comply with administrative subpoenas issued by the 

Commission requiring him to produce  documents on his own behalf and on behalf of 

Affinity Gold Corporation (“Affinity Gold” or the “Company”) as the Company’s Chief 

Executive Officer.  

I. INTRODUCTION

This Application seeks to enforce document production subpoenas issued to and

served upon Corey J. Sandberg and Affinity Gold pursuant to an Order Directing Private 

Investigation and Designating Officers to Take Testimony in the investigation captioned 

 17-mc-00062

CASE 0:17-mc-00062-JRT-TNL   Document 1   Filed 12/11/17   Page 1 of 10



2 
 

In the Matter of Affinity Gold Corp. (Internal File No. C-08405) (“the Affinity Gold 

Investigation”). The staff of the Commission (the “Staff”) issued subpoenas to Mr. 

Sandberg and to Affinity Gold, care of Mr. Sandberg as the Company’s Chief Executive 

Officer, on March 13, 2017 and July 7, 2017 (collectively, the “Subpoenas”) requesting 

the production of certain documents. While Mr. Sandberg did produce some documents 

to the Staff, he has withheld many other documents that are responsive to the Subpoenas 

and material to the Staff’s investigation. The Staff has contacted Mr. Sandberg repeatedly 

in attempts to secure these withheld documents. Mr. Sandberg has neither produced the 

documents nor provided the Staff with a reason why the documents are properly 

withheld.  

The Commission has made no prior application to any court for similar relief and 

now seeks the aid of this Court by means of a summary proceeding. All attempts to 

obtain voluntary compliance with the Subpoenas have failed. A summary proceeding is 

necessary so that the Staff may complete its investigation expeditiously. As set forth 

below, the Commission has met all of the requirements for judicial enforcement of its 

Subpoenas and, therefore, respectfully requests the Court to enter an order compelling 

Mr. Sandberg to produce documents.   

II. STATEMENT OF FACTS 

A. Corey J. Sandberg 

Respondent Corey J. Sandberg is a U.S. citizen who resides in Maple Grove, 

Minnesota. Mr. Sandberg is the Chief Executive Officer of Affinity Gold.  (Javorski 

Decl. ¶¶ 7-8). According to documents produced to the Commission, Affinity Gold is a 

CASE 0:17-mc-00062-JRT-TNL   Document 1   Filed 12/11/17   Page 2 of 10



3 
 

mining company in the business of acquiring and developing mineral mining projects. 

Affinity Gold purports to conduct such business in Peru and Colombia. (Id. at ¶ 8). 

B. The Commission’s Investigation  

On March 6, 2017, the Commission issued an Order Directing Private 

Investigation and Designating Officers to Take Testimony in the Affinity Gold 

Investigation (the “Formal Order”).1 (Javorski Decl. ¶ 5). The Formal Order authorizes 

the Staff to investigate whether any persons have engaged, are engaging or will engage in 

violations of Section 17(a) of the Securities Act of 1933 (“Securities Act”) and Section 

10(b) of the Securities Exchange Act of 1934 (“Exchange Act”) and Rule 10b-5 

thereunder, by various acts and practices reported in the Formal Order or by any act or 

practice of similar purport or object. (Id. at ¶ 6). The Formal Order empowers the Staff to, 

among other things, subpoena witnesses and require parties to produce documents. (Id. at 

¶ 6). 

C. Mr. Sandberg’s Failure to Provide Documents as Required by the 
Commission’s Subpoenas 

 
Pursuant to the Formal Order, the Staff issued subpoenas on March 13, 2017 and 

July 7, 2017 requiring Mr. Sandberg to produce certain documents to the Commission. 

(Javorski Decl. ¶¶ 10, 17). Mr. Sandberg has yet to fulfill his obligations under these 

Subpoenas. 

 

                                                           
1 The Commission is willing to provide the Court with a copy of the Formal Order, but 
respectfully requests an in camera review because the Commission’s investigation is 
non-public and ongoing. 

CASE 0:17-mc-00062-JRT-TNL   Document 1   Filed 12/11/17   Page 3 of 10



4 
 

On March 13, 2017, the Staff issued two subpoenas for documents relevant to 

Affinity Gold’s business; the first was issued to Mr. Sandberg, the second issued to 

Affinity Gold care of Mr. Sandberg. (Javorski Decl. ¶ 10). Both subpoenas called for the 

production of, among other things, communications with investors or potential investors, 

documents relevant to Affinity Gold’s mining projects, and the identity of Affinity 

Gold’s investors and individuals who communicated with those investors on Affinity 

Gold’s behalf. Mr. Sandberg’s response to both subpoenas was initially due on March 28, 

2017. (Id. at ¶ 10). The Staff was able to communicate with Mr. Sandberg on April 13, 

2017 and extended the due date to April 28, 2017. (Id. at ¶ 12). On this new due date, Mr. 

Sandberg emailed the Staff claiming that messages he sent the Staff the previous day 

were undeliverable. (Id. at ¶ 13). Mr. Sandberg’s April 28, 2017 email attached twenty 

business emails in PDF form. (Id. at ¶ 14). The Staff provided Mr. Sandberg with a link 

to a file transfer website to facilitate production of the remainder of the documents under 

subpoena. (Id. at ¶ 15). Mr. Sandberg failed to produce any additional documents 

responsive to the Commission’s subpoenas. On May 19, 2017, the Staff notified Mr. 

Sandberg that his testimony would be required in this matter, and if he failed to produce 

all responsive documents by May 26, 2017, additional testimony may be necessary. (Id. 

at ¶ 16). 

On July 7, 2017, the Staff received a returned, unopened package containing its 

March 13, 2017 subpoena directed to Affinity Gold care of Mr. Sandberg. On the same 

day, the Staff issued a new subpoena for the same documents to be produced by July 14, 

CASE 0:17-mc-00062-JRT-TNL   Document 1   Filed 12/11/17   Page 4 of 10



5 
 

2017. (Javorski Decl. ¶ 17). Neither Mr. Sandberg nor Affinity Gold has produced any 

documents responsive to this subpoena. 

On July 27, 2017, pursuant to a Commission subpoena, Mr. Sandberg gave sworn 

testimony. During testimony, Mr. Sandberg admitted that he has not produced all 

documents responsive to the Subpoenas: 

A:  … Because, to be honest, I’m embarrassed but concerned that I haven’t 
provided all the documents to you yet, so – 
 

(Javorski Decl., Exh. 8 at 12:18-20).   

Q:  … Have you produced all documents relevant or responsive to these 11 
requests? 
A: No. 
Q: No, you haven’t? 
A: Not all of them, no. 

(Id. at 16:6-10).   

A: … I’m not done in this process of searching and finding and producing them 
for you. 
Q: Okay. 
A: There are more to produce. 
 

 (Id. at 17:9-13).   

After Mr. Sandberg’s sworn testimony, the Staff contacted Mr. Sandberg to 

remind him to produce the requested documents and to help him with the technical tools 

to do so. Specifically, on August 2, 2017, the Staff provided Mr. Sandberg step-by-step 

instructions on how to properly export and produce relevant email files and metadata. 

(Javorski Decl. ¶ 21). On August 25, 2017, the Staff forwarded these instructions again to 

Mr. Sandberg. (Id.). 

CASE 0:17-mc-00062-JRT-TNL   Document 1   Filed 12/11/17   Page 5 of 10



6 
 

On October 6, 2017, having not received any additional documents from Mr. 

Sandberg, Staff wrote in a letter to Mr. Sandberg, “[a]s we have repeatedly informed you, 

and as you acknowledged in your testimony on July 27, 2017, you have not fulfilled your 

obligation to produce all documents requested in [the Subpoenas].” (Javorski Decl. ¶ 22). 

In the same letter, the Staff stated, “[w]e must receive all documents responsive to the 

subpoenas issued to you and Affinity Gold Corporation as soon as possible. If we do not 

hear from you before October 13, 2017, we will begin preparing a subpoena enforcement 

action against both you and Affinity Gold Corporation to be filed in federal court.” (Id. at 

¶ 22). 

As of December 11, 2017, Mr. Sandberg has not produced any documents to the 

Commission other than the documents included in his initial production on April 28, 

2017. (Javorski Decl. ¶ 23).   

III. ARGUMENT 

A. This Court May Resolve This Matter Through a Summary Proceeding. 

The Commission may seek an order requiring compliance with a subpoena upon 

application because subpoena enforcement proceedings are generally summary in nature.  

See United States v. McDonnell Douglas Corp., 751 F.2d 220, 229 (8th Cir. 1984); see 

also EEOC v. Tempel Steel Co., 814 F.2d 482, 485 (7th Cir. 1987) (subpoena 

enforcement proceedings “are designed to be summary in nature”); SEC v. Sprecher, 594 

F.2d 317, 320 (2d Cir. 1979). “Questions concerning agency subpoenas should be 

promptly determined so that subpoenas, if valid, may be speedily enforced.” SEC v. First 

Security Bank, 447 F.2d 166, 168 (10th Cir. 1971) (citing United States v. Davey, 426 

CASE 0:17-mc-00062-JRT-TNL   Document 1   Filed 12/11/17   Page 6 of 10



7 
 

F.2d 842, 845 (2d Cir. 1970).   

Furthermore, jurisdiction to resolve this matter properly lies with this Court. 

Section 22(b) of the Securities Act and Section 21(c) of the Exchange Act authorize the 

Commission to seek, and any federal court to issue, an order compelling compliance with 

Commission subpoenas upon application by the Commission. See 15 U.S.C. §§ 77v(b), 

78u(c). More specifically, Section 21(c) of the Exchange Act provides that “the 

Commission may invoke the aid of any court of the United States within the jurisdiction 

of which such investigation or proceeding is carried on, or where such person resides or 

carries on business, in requiring … the production of books, papers, correspondence, 

memoranda, and other records.” 15 U.S.C. § 78u(c). Since Mr. Sandberg resides in 

Minnesota, gave testimony there, and conducts business there, jurisdiction and venue 

properly lie within the District of Minnesota. Id. 

B. The Commission Meets the Requirements for Judicial Enforcement of 
the Subpoenas. 
 

A district court is bound to enforce an administrative subpoena if the information 

sought “[1] is within the authority of the agency, [2] the demand is not too indefinite and 

[3] the information sought is reasonably relevant.” United States v. Morton Salt Co., 338 

U.S. 632, 652 (1950); see also SEC v. Arthur Young & Co., 584 F.2d 1018, 1021 (D.C. 

Cir. 1978). “An affidavit from a government official is sufficient to establish a prima 

facie showing that these requirements have been met.” In re McVane, 44 F.3d 1127, 1136 

(2d Cir. 1995). Here, because the Commission has met these criteria, and Mr. Sandberg 

cannot show unreasonableness, the Court should enforce the Subpoenas. 

CASE 0:17-mc-00062-JRT-TNL   Document 1   Filed 12/11/17   Page 7 of 10



8 
 

Congress has authorized the Commission to conduct investigations in its discretion 

to determine whether any person has violated, is violating, or is about to violate the 

provisions of the federal securities laws. See 15 U.S.C. §§ 77t(a), 78u(a)(1). In order to 

carry out this task, Congress endowed the Commission with broad investigatory powers.  

See Arthur Young & Co., 584 F.2d 1018, 1023 (D.C. Cir. 1978); see also Commodity 

Futures Trading Commission v. Tokheim, 153 F.3d 474, 477 (7th Cir. 1998) (quoting 

United States v. Morton Salt Co., 338 U.S. 632, 642-43 (1950)) (stating that the 

Commission can “investigate merely on suspicion that the law is being violated, or even 

just because it wants assurance that is not”). Those investigatory powers include the 

ability to subpoena witnesses and require the production of documents that the 

Commission deems relevant to its investigation. See 15 U.S.C. §§ 77s(c), 78u(b).   

Pursuant to the statutes cited above, the Commission issued a Formal Order to 

conduct the Affinity Gold Investigation. The Formal Order states that the investigation’s 

purpose is to determine, among other things, whether Affinity Gold and others violated 

the anti-fraud provisions of the federal securities laws. The Subpoenas served upon Mr. 

Sandberg were issued pursuant to that Formal Order and, therefore, are consistent with 

the Commission’s administrative procedures.   

The information sought from Mr. Sandberg is relevant and not indefinite. The 

Commission is only required to make a minimal showing of relevance. As long as the 

evidence sought is not plainly irrelevant to any lawful purpose, the Subpoenas should be 

enforced. Arthur Young & Co., 584 F.2d at 1029. It is the burden of the opposing party to 

establish that the subpoena is unreasonable. See SEC v. Blackfoot Bituminous, Inc., 622 

CASE 0:17-mc-00062-JRT-TNL   Document 1   Filed 12/11/17   Page 8 of 10



9 
 

F.2d 512, 515 (10th Cir. 1980); SEC v. Brigadoon Scotch Distrib. Co., 480 F.2d 1047, 

1056 (2d Cir. 1973). That burden, however, is “not easily met” when the Commission’s 

inquiry is legally authorized and the information is relevant to the inquiry. Brigadoon 

Scotch, 480 F.2d at 1056.   

In this case, the documents sought are relevant to the Commission’s investigation. 

Mr. Sandberg has taken investments based on representations that may have been 

materially incomplete. The Commission needs the requested documents in order to 

determine whether the money Mr. Sandberg raised to fund his mining operations was 

procured as part of a fraudulent scheme or other violation of the federal securities laws. 

Obtaining Mr. Sandberg’s documents will help the Staff complete its inquiry.   

The scope of the Commission’s production request is not overly broad or 

otherwise unreasonable. Mr. Sandberg has not objected to the Subpoenas. During his 

testimony, Mr. Sandberg did not provide the Staff with any reasons why he could not 

produce the documents under subpoena. Mr. Sandberg has now had more than eight 

months to comply with the document requests. The Staff has repeatedly informed him 

that, if he did not comply voluntarily, the Staff would have to bring a subpoena 

enforcement proceeding. It is clear that Mr. Sandberg has chosen not to comply with the 

Commission’s Subpoenas and, as a result, the Commission has no other remedy than 

judicial enforcement of the Subpoenas.    

WHEREFORE, the United States Securities and Exchange Commission 

respectfully requests that this Court issue an Order: 

CASE 0:17-mc-00062-JRT-TNL   Document 1   Filed 12/11/17   Page 9 of 10



A. Directing Corey J. Sandberg and Affinity Gold Corporation to produce to

the Commission Staff all documents responsive to the Commission's

Subpoenas;

B. Granting the Commission such other and further relief as may be necessary

and appropriate to achieve compliance with the Subpoenas and with any

Order the Court issues in its enforcement thereof; and

C. Permitting service of all Orders on Mr. Sandberg by overnight express mail

or electronic mail.

Dated: December 11, 2017 Respectfully submitted,

Charles J. Kerstetter (PA No. 67088)
Bradley N. Lewis (IL No. 6297027)
United States Securities and Exchange Commission
175 West Jackson Boulevard, Suite 1450
Chicago, Illinois 60604
Telephone: (312) 596-6008
[email protected]
Attorneys for Plaintiff

Craig Baune (331727)
Assistant United States Attorney
District of Minnesota
600 U.S. Courthouse
300 South Fourth Street
Minneapolis, MN 55414
Telephone: (612) 664-5600
Craig.B aune @usdoj . gov
Local Counsel

to

CASE 0:17-mc-00062-JRT-TNL   Document 1   Filed 12/11/17   Page 10 of 10


	I. INTRODUCTION
	II. STATEMENT OF FACTS
	A. Corey J. Sandberg
	B. The Commission’s Investigation
	C. Mr. Sandberg’s Failure to Provide Documents as Required by the Commission’s Subpoenas

	III. ARGUMENT
	A. This Court May Resolve This Matter Through a Summary Proceeding.
	B. The Commission Meets the Requirements for Judicial Enforcement of the Subpoenas.