Affluence Corp (AFFU)

[BigBadWolf]

Stephen M. Hicks, founder of Southridge Capital Management LLC and Southridge Advisors LLC, faced significant sanctions from the U.S. Securities and Exchange Commission (SEC). In 2010, the SEC charged Hicks and his firms with defrauding investors by misrepresenting the liquidity of fund assets, overvaluing investments, and misusing investor funds to pay expenses of other funds they managed.

In 2017, a federal court in Connecticut ordered Hicks and his firms to pay nearly $13 million, including $7.9 million in disgorgement and prejudgment interest, and a $5 million civil penalty. The court also enjoined them from future violations of federal securities laws.

Additionally, in 2018, the SEC barred Hicks from associating with any investment adviser, broker, or dealer.

Despite the SEC's 2018 order barring Stephen M. Hicks from associating with any investment adviser, broker, or dealer, he has continued to be involved with Trillium Partners, LP. Trillium is a Delaware limited partnership that engages in investments, particularly in micro-cap and OTC-listed companies.

According to a 2021 Schedule 13G filing, Trillium's general partner is Maple Leaf Capital, and Stephen Hicks serves as its manager. In this capacity, Hicks holds shared voting and dispositive power over Trillium's securities holdings.

While Hicks is barred from roles that require registration as an investment adviser, broker, or dealer, his position as a manager of a general partner may not fall under these specific prohibitions. However, this arrangement raises questions about compliance with the spirit of the SEC's sanctions.

It's important to note that Hicks's continued involvement in investment activities through Trillium Partners, LP, despite the SEC's bar, could be subject to regulatory scrutiny. Investors and associated parties should exercise caution and consult legal counsel when dealing with entities connected to individuals with such regulatory histories.
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Chad Nelson has no public records indicating that he has been subject to SEC sanctions. Chad M. Nelson however is a seasoned investment professional with over two decades of experience in capital markets, particularly focusing on micro-cap and small-cap equities. He is associated with two notable investment entities: Invenire Capital, LLC and Traverse Opportunity Fund, LP.

Founded in 2017 by Chad Nelson, Invenire Capital, LLC is an independent hedge fund manager based in Ridgefield, Connecticut. The firm manages and administers the business and affairs of Invenire Partners, LP, offering investment opportunities exclusively to Accredited Investors and Qualified Purchasers.

Invenire Capital is registered as an Exempt Reporting Advisor (ERA) with the U.S. Securities and Exchange Commission

Chad Nelson also serves as the Managing Partner of Traverse Opportunity Fund, LP, a private investment fund that engages in financing activities, including convertible debt investments in micro-cap and OTC-listed companies
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Both Invenire Capital and Traverse Opportunity Fund list their business address as 90 Grove Street, Suite 206, Ridgefield, Connecticut. Notably, this address is also associated with Trillium Partners, LP, managed by Stephen Hicks

https://www.otcmarkets.com/file/company/financial-report/459254/content
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CEOs and Boards of Directors (BOD) have strict fiduciary duties under U.S. corporate law when arranging debt deals, including those involving Convertible Debt Agreements (CDAs). These fiduciary duties are designed to protect shareholders and ensure decisions are made in the company’s best interests. Failing to uphold these duties can result in legal liability, SEC enforcement, or shareholder litigation.

Duty of Care requires informed, diligent, and prudent decision-making.

When entering into a CDA or other debt structure, the board and CEO must:

Fully understand the terms (e.g., conversion rates, dilution potential, interest rates, default triggers).

Conduct proper due diligence on the lender.

Assess long-term impacts on capital structure and shareholder value.

Should retain financial/legal advisors to review terms.

Failing to investigate “toxic” or highly dilutive debt terms can be a breach of the duty of care.

Duty of Loyalty as described by the SEC means that they must act in the best interests of the corporation and its shareholders, not their own.

CEO's & BOD members are Prohibited from:

Self-dealing (e.g., approving debt where they or insiders benefit disproportionately).

Undisclosed conflicts of interest (e.g., if the CEO or a director has ties to the lender).

Diverting corporate opportunities for personal gain.

If a CEO or board member arranges a CDA with a related party or fails to disclose a conflict, that could violate this duty.