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The US Securities and Stock Exchange Commission (SEC) filed civil accusations and sought to freeze an emergency assets against First Liberty Building & Loan, LLC, a borrowing institution based in Newnan, Georgia and its founder and owner Edwin Brant Frost IV. SEC claims that the company and its owner organized the Ponzi scheme, which cheated on approximately 300 investors at least $ 140 million in more than ten years.
Accusations against first liberty: high yields, false promises
According to SEC complaintFrom 2014 to June 2025, the first Liberty and Frost lured retail investors with high -yield promises up to 18% through bills of exchange and participation in the loan. Investors have been told that their funds will be used to provide short -term bridge loans to businesses with high interest rates, making sure that very few loans were in operation and that the installments would come from debtors, often by administration of small enterprises or other commercial loans.
However Sec They say most of these loans did not work as represented. Until 2021, First Liberty used new investors funds to pay the main and interest with previous investors, the classic structure of the Ponzi scheme. The complaint also describes in detail the alleged misuse of investors’ money for personal use, including more than $ 2.4 million in credit card payments, more than $ 335,000 spent at a rare coin dealer and $ 230,000 on family leave. Frost is also charged with using the investor’s money to earn over $ 570,000 in political donches.
Seened regulatory reactions and relief
The SEC complaint, filed at the US District Court for the Northern district of Georgia, accuses both the first freedom and Frost by violating the Antifraud’s provisions of the Federal Laws on Securities. Five subjects controlled by frost is also named as a defendant. SEC is looking for freezing of emergency asset, appointment of the recipient for entities, standing orders, civic sanctions and disagreement with poorly obtained profits with prejudice.
Without confirmation or rejection of charges, Frost and Relief Defendants agreed with emergency and permanent requests for assistance to SEC, funds to be later determined by the court.
A political and community impact
Frost, a prominent figure in the Georgian Republican circles, is known for his political gifts and connections. The collapse of First Liberty sent shock waves through the Georgian conservative political network, with many investors hired through right -wing media and personal connections. At the end of June at the end of June, the sudden weaning of the company left investors and employees in the limbo.
SEC warning for investors
Justin C. Jeffries, an associated director of enforcement for the regional authority in Atlanta SeC, emphasized the recurring nature of such schemes:
“The promise of a high return on investment is a red flag that should make all potential investors think twice or maybe even three times before investing their money. Unfortunately, we have seen this film before and actors attract investors with seemingly overcrowded revenues-and don’t end well.”
SEC deepens its focus on protecting retail investors and prosecution of Ponzi schemes and other affinity fraud, especially those who focus on specific communities or use political or religious networks. Investors who believe that they could have been affected is recommended to turn to the securities division in Georgia.
