SEC v. Edwin Brant Frost IV; and First Liberty Building & Loan LLC, No. LR-26358, Northern District of Georgia (July 22, 2025) — Press Release

U.S. SECURITIES AND EXCHANGE COMMISSION Litigation Release No. 26358 / July 22, 2025 Securities and Exchange Commission v. Edwin Brant Frost IV and First Liberty Building & Loan, LLC, Civil Action No. 1:25-cv-03826 (N.D. Ga. filed July 10, 2025) SEC Charges Georgia-based First Liberty Building & Loan and its Owner for Operating a $140 Million Offering Fraud On July 10, 2025, the Securities and Exchange Commission filed charges seeking an asset freeze and other emergency relief against Georgia-based First Liberty Building & Loan, LLC and its founder and owner Edwin Brant Frost IV in connection with a Ponzi scheme that defrauded approximately 300 investors of at least $140 million. According to the SEC’s complaint, from approximately 2014 through June 2025, First Liberty and Frost offered and sold to retail investors promissory notes and loan participation agreements that offered returns of up to 18% by representing that investor funds would be used to make short-term bridge loans to businesses at relatively high interest rates. The defendants allegedly told investors that very few of these loans had defaulted and that they would be repaid by borrowers via Small Business Administration or other commercial loans. The complaint also alleges that, while some investor funds were used to make bridge loans, those loans did not perform as represented, and most loans ultimately defaulted and ceased making interest payments. Since at least 2021, First Liberty operated as a Ponzi scheme by using new investor funds to make principal and interest payments to existing investors, according to the complaint. The complaint further alleges that Frost misappropriated investor funds for personal use, including by using investor funds to make over $2.4 million in credit card payments, paying more than $335,000 to a rare coin dealer, and spending $230,000 on family vacations. The SEC’s complaint, filed in the U.S. District Court for the Northern District of Georgia, charges First Liberty and Frost with violating Section 17(a) of the Securities Act of 1933 and Section 10(b) of the Securities Exchange Act of 1934 and Rule 10b-5 thereunder, and names five entities that Frost controlled as relief defendants. The SEC seeks emergency relief, including an order freezing assets, appointing a receiver over the entities, and granting an accounting and expedited discovery. The SEC also seeks permanent injunctions and civil penalties against defendants, a conduct-based injunction against Frost, and disgorgement of ill-gotten gains with prejudgment interest against defendants and relief defendants. Without admitting or denying the allegations in the complaint, the defendants and relief defendants consented to the proposed judgment ordering the SEC’s requested emergency and permanent relief, with monetary remedies to be determined by the court at a later date. On July 11, 2025, the District Court granted all relief sought by the SEC. The SEC’s investigation remains ongoing. The SEC's investigation was conducted by Justin Delfino and Tiffany Kunkle and supervised by Peter Diskin and Justin C. Jeffries, all of the SEC’s Atlanta Regional Office. The litigation is being conducted by Kristin Murnahan and Graham Loomis.

U.S. SECURITIES AND EXCHANGE COMMISSION Litigation Release No. 26358 / July 22, 2025 Securities and Exchange Commission v. Edwin Brant Frost IV and First Liberty Building & Loan, LLC, Civil Action No. 1:25-cv-03826 (N.D. Ga. filed July 10, 2025) SEC Charges Georgia-based First Liberty Building & Loan and its Owner for Operating a $140 Million Offering Fraud On July 10, 2025, the Securities and Exchange Commission filed charges seeking an asset freeze and other emergency relief against Georgia-based First Liberty Building & Loan, LLC and its founder and owner Edwin Brant Frost IV in connection with a Ponzi scheme that defrauded approximately 300 investors of at least $140 million. According to the SEC’s complaint, from approximately 2014 through June 2025, First Liberty and Frost offered and sold to retail investors promissory notes and loan participation agreements that offered returns of up to 18% by representing that investor funds would be used to make short-term bridge loans to businesses at relatively high interest rates. The defendants allegedly told investors that very few of these loans had defaulted and that they would be repaid by borrowers via Small Business Administration or other commercial loans. The complaint also alleges that, while some investor funds were used to make bridge loans, those loans did not perform as represented, and most loans ultimately defaulted and ceased making interest payments. Since at least 2021, First Liberty operated as a Ponzi scheme by using new investor funds to make principal and interest payments to existing investors, according to the complaint. The complaint further alleges that Frost misappropriated investor funds for personal use, including by using investor funds to make over $2.4 million in credit card payments, paying more than $335,000 to a rare coin dealer, and spending $230,000 on family vacations. The SEC’s complaint, filed in the U.S. District Court for the Northern District of Georgia, charges First Liberty and Frost with violating Section 17(a) of the Securities Act of 1933 and Section 10(b) of the Securities Exchange Act of 1934 and Rule 10b-5 thereunder, and names five entities that Frost controlled as relief defendants. The SEC seeks emergency relief, including an order freezing assets, appointing a receiver over the entities, and granting an accounting and expedited discovery. The SEC also seeks permanent injunctions and civil penalties against defendants, a conduct-based injunction against Frost, and disgorgement of ill-gotten gains with prejudgment interest against defendants and relief defendants. Without admitting or denying the allegations in the complaint, the defendants and relief defendants consented to the proposed judgment ordering the SEC’s requested emergency and permanent relief, with monetary remedies to be determined by the court at a later date. On July 11, 2025, the District Court granted all relief sought by the SEC. The SEC’s investigation remains ongoing. The SEC's investigation was conducted by Justin Delfino and Tiffany Kunkle and supervised by Peter Diskin and Justin C. Jeffries, all of the SEC’s Atlanta Regional Office. The litigation is being conducted by Kristin Murnahan and Graham Loomis.