Georgia Securities Division Issues Emergency Order Against Nathaniel Darnell in the Frostopus Fallout
Last summer, I wrote a Peach Pundit post about the “referral fee” problem and why broker rules exist for a reason, especially when someone is steering money into an investment product and getting paid on the back end. Here is that post:
Now we have something far more concrete than rumor, screenshots, and secondhand stories. The Georgia Secretary of State’s Securities Division has issued an Emergency Order in the matter of Timothy Nathaniel Darnell (ENSC-261288). You may know him better as simply Nathaniel Darnell, the leader of our favorite bunch of Goofballs, Rejects, and A-holes.
What follows is a summary of what the Order alleges and what it says the state is doing next. Darnell, like all accused people in America, is innocent until proven guilty, and is entitled to contest the Order through the hearing process described in the notice.
The TL;DR version
According to the Order, Darnell placed forty-five (45) individuals into First Liberty investments and sold seventy-six (76) First Liberty investments between December 2020 and June 2025, with total principal invested of $6,675,000.00.
The Order further alleges Darnell received commissions from First Liberty, generally one percent (1%) when a client invested and one percent (1%) per year the client remained invested, totaling $249,109.94.
The Order also includes age-related statistics, stating approximately sixty percent (60%) of the individuals he placed were sixty (60) or older, and approximately seventy-one percent (71%) of the investments he sold were sold to people over sixty (60).
The document has been referred to the Cobb County District Attorney for criminal prosecution.
What the state just did, and what comes next
The Order directs Darnell to immediately cease and desist from violations of the Georgia Uniform Securities Act of 2008, bars him from agent activity and investment adviser representative activity in Georgia, and imposes a $500,000 civil penalty, payable within thirty days of finalization of the Emergency Order.
It then lays out the includes the procedural language for Darnell to seek a hearing. The notice says that if Darnell does not request a hearing and none is ordered within thirty days after the date of service, the Order becomes final by operation of law, and if a hearing is requested or ordered, the Commissioner may modify, vacate, or extend the Order until final determination.
The part that should make your stomach turn
Everything about the Frostopus is a series of disgusting allegations of brutally corrupt people taking advantage of innocent folks using politics and faith as the battering ram to break down the doors. The Order quotes an investor affidavit that describes the kind of trust pipeline that makes people let their guard down. In the Order, Investor #1 states that Darnell “used his political and religious views to gain our trust,” and the Order ties their relationship to involvement in the Georgia Republican Assembly.
The Order also alleges that Darnell made “guaranteed” return representations and “safe” and “appropriate” assurances to Investor #1 and his wife, and that he told them First Liberty never had a borrower default.
Follow the money, as the Order describes it: Perservero Properties
Based on the Emergency Order, Darnell started Perservero Properties, LLC February 12, 2021 with its principal office listed in Powder Springs. From there, the Order alleges the LLC quickly became the payee vehicle for money tied to First Liberty, because it quotes Darnell instructing Edwin Brant Frost V (Cinco) on March 12, 2021 that “any further payments / commissions for me please make payable to ‘Perservero Properties LLC,’” and it notes his first commissions from First Liberty were received by check the same day.
As for the purpose, the Order says Darnell did not disclose Perservero as an outside business activity to Bankers Life until July 25, 2021, and when he did, he described it on his OBA form as a house-flipping business he and his wife intended to operate, buying houses, renovating them, and renting or flipping them, with his involvement supposedly minimal and mostly accounting. The state alleges that description was materially misleading, because it says he failed to disclose that First Liberty commission payments were being deposited into the Perservero bank account, and it further states the investigation found First Liberty commissions were the primary source of income into Perservero, that Perservero did not flip any homes, and that the only property it controlled and renovated was Darnell’s personal residence.
Perservero Properties functioned as the receiving account for commissions connected to First Liberty deals while Darnell was allegedly directing Bankers Life clients into First Liberty and facilitating those transactions outside the firm’s approved channels. The Order even quotes specific commission asks in the middle of client-money movements, including a text where Darnell says an investor’s $500K is “hitting your coffers” and then asks, “Are you able to send Perservero Properties the $5K commission on that sale today.”
The Order lists examples of those alleged personal expenses, including purchases at liquor stores and other retail, over $70,000 in payments on Darnell’s personal Chase credit card, and $17,400 in car payments on a 2019 Lexus RX auto loan.
Bankers Life flags “elder abuse,” and the Order says what happened next
One of the more telling passages in the Order quotes an email from a Central Supervisory Principal at Bankers Life Securities stating that the purpose of the inquiry was to ensure elder abuse was not an issue with withdrawals, and asking the reason for the transaction, whether Darnell spoke with the client, and whether he had concerns.
The Order then quotes Darnell’s response, and it alleges that he did not disclose to Bankers Life that he recommended the transaction, that the “new opportunity” was First Liberty, or that he received a commission connected to the transaction.
Calling the LLC “Perservero” is the kind of branding choice that would be funny if the stakes were not so brutal. “Persevere” comes from the Latin persevērāre, to persist or continue steadfastly, and sure, that sounds like rugged, bootstraps, real-estate-hustle virtue signaling on a business card, but in the context the Emergency Order lays out, it lands as a little gross because the people who are now truly being forced to persevere are the victims. Especially the retirees the Order says were steered into these investments and who get to spend their golden years grinding through stress, uncertainty, paperwork, and whatever recovery process follows, while the “perseverance” name sits there like a motivational poster taped to the wall of a mess someone else made.
Nathaniel, this is where normal people would feel shame.
The compliance angle is not a side note, it is the point
The Order frames the core issue as alleged unapproved, off-books activity. It explicitly characterizes the First Liberty offerings here as “unregistered First Liberty securities,” and alleges Darnell recommended that Bankers Life clients invest in them and received commissions outside of Bankers Life Securities and Advisory services.
It also states that Bankers Life compliance training informed him he was prohibited from placing customers into unregistered securities, “i.e., First Liberty,” and the Order alleges he nevertheless directed clients to First Liberty and received commissions as an unapproved outside activity.
Separately, the Order uses harsh language in its conclusions, including the statement that Darnell “preyed on senior citizens” to invest substantial amounts of retirement funds into First Liberty investments unapproved by Bankers Life. While I feel obligated to point out that is the Commissioner’s allegation in the Order, not a court finding, if proven true I predict the only people who would not see it this way would be members of the GRA.
If you read the document closely, the picture it paints is not “a casual referral,” it is an alleged commission-driven pipeline into an unapproved, unregistered securities product, and the Order backs that claim with totals, tables, emails, and quoted texts.
That is why, when you hear “oh, it was just a referral,” the right questions are still the same: who got paid, what was the compensation structure, and what did the broker or adviser do to earn it. This Emergency Order lays out the state’s answers to those questions, and now the legal process described in the notice determines what happens next.
Back in July, Darnell told me that he was a victim of the Frostopus too and that he had actually contacted the receiver to ask how he could get his money back. At no time did he indicate that he was actually a cog in the machine. But records and evidence are beginning to tell a different story.
