SEC v. Aaron O’Brian Freeman, No. 7:25-cv-01514-BO, Eastern District of North Carolina (Sept. 22, 2025) — Complaint

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UNITED STATES DISTRICT COURT
EASTERN DISTRICT OF NORTH CAROLINA
SOUTHERN DIVISION

SECURITIES AND EXCHANGE
COMMISSION,

                                     Plaintiff,

                   v. Civil Action File No.
__________________

AARON O’BRIAN FREEMAN,

                                                                            JURY                                                                            DEMAND
                                      Defendant.

COMPLAINT FOR INJUNCTIVE AND OTHER RELIEF
Plaintiff Securities and Exchange Commission (the “SEC” or
“Commission”) files this Complaint for injunctive and other relief and alleges as
follows:
OVERVIEW
1. Between January 2024 and February 2024, Defendant Aaron O’Brian
Freeman (“Freeman”), a resident of Lake Waccamaw, North Carolina, engaged in a
“free-riding” scheme involving multiple brokerage accounts that he controlled,
including ones he opened in the names of two relatives, one of whom is disabled.
2. “Free-riding” schemes involve a brokerage customer trading securities

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without having sufficient funds to pay for the trading.  Such schemes may include
taking advantage of the “immediate access” or “instant deposit” credit extended by
certain broker-dealers in advance of incoming fund deposits settling into the
brokerage account, and buying and selling securities with the hope of withdrawing
trading profits before the broker-dealers discover the deposits to be fraudulent.
3. Freeman engaged in his scheme by making fraudulent deposits and
transfers into brokerage accounts from bank or other securities accounts he knew
were closed or lacked sufficient funds, and then seeking to immediately trade on or
withdraw funds from the brokerage accounts before the recipient broker-dealers
discovered that the deposited amounts were fraudulent.

4. In total, Freeman initiated nearly $3.5 million in unfunded deposits,
made securities purchases totaling $889,087.04 using the immediate credit extended
by the broker-dealers, and spent approximately $4,000 in debit card payments on a
debit card received from one of the recipient broker-dealers.  Each broker-dealer
ultimately discovered the scheme, froze Freeman’s access to the accounts, reversed
the deposits, and liquidated the positions.  Nevertheless, they suffered a total net loss
of at least $5,463.26.
5. Through his misconduct, Freeman violated Section 10(b) of the
Securities Exchange Act of 1934 and Rule 10b-5 thereunder.
6. By this action, the SEC seeks permanent injunctive relief,

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disgorgement of ill-gotten gains plus prejudgment interest, and civil penalties.
DEFENDANT AND OTHER RELEVANT PARTIES
7. Defendant Aaron O’Brian Freeman, 31, is a resident of Lake
Waccamaw, North Carolina. Freeman’s known bank accounts during the relevant
time period reflected little to no deposits or savings on a month-to-month basis.
Upon information and belief, Freeman had no significant source of income during
the relevant time period.
8. Maxnificent Carriers, LLC (“Maxnificent Carriers”) purported to be
a North Carolina courier and delivery service organized by Freeman in 2022.  Per
applications to brokerage firms submitted by Freeman for that entity, Freeman
claimed he was earning $250,000 annually through Maxnificent Carriers.  Upon
information and belief, the company did not engage in any substantial business
activities consistent with that reported income.  Following its organization,
Maxnificent Carriers failed to file any annual report.
9. Aunt 1, age 57, of Lake Waccamaw, North Carolina, is Freeman’s
disabled aunt who lives with Freeman and Freeman’s mother, who is Aunt 1’s
sister.
10. Aunt 2, age 55, of Lake Waccamaw, North Carolina, is another one of
Freeman’s aunts who lives on the same road as Freeman and Aunt 1.

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JURISDICTION AND VENUE

11. The SEC brings this action pursuant to Sections 21(d), 21(e), and 27
of the Exchange Act [15 U.S.C. §§ 78u(d), 78u(e), and 78aa].
12. Freeman, directly or indirectly, made use of the means and
instrumentalities of interstate commerce or of the mails in connection with the acts,
transactions, practices, and courses of business alleged in this Complaint, including
but not limited to, submitting fraudulent brokerage applications and online deposits
via the internet.
13. Venue is proper in this District pursuant to Section 27(a) of the
Exchange Act [15 U.S.C. § 78aa(a)].  During the relevant time period, Freeman
has been and continues to be a resident of Lake Waccamaw, North Carolina, in
Columbus County, North Carolina.  A substantial number of the acts, transactions,
practices, and courses of business that form the basis of the violations alleged in
this Complaint occurred in this District.

Freeman Begins His Initial Free-Riding Efforts Through
Brokerage Accounts Opened in His Name in November 2023

14. Freeman’s initial free-riding efforts began at least as early as November
2023.
15. Such initial “free-riding” began with Freeman opening personal
brokerage accounts in his name.

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16. Freeman then submitted a series of bogus deposits and account
transfers, totaling $787,000, to five broker-dealers.
17. On November 3, 2023, Freeman submitted an online application and
opened a brokerage account at Broker A on which he claimed an income of more
than $250,000 from his purported delivery business, Maxnificent Carriers, and a
net worth between $500,000 and $999,999.
18. Freeman then initiated $140,000 in automated clearinghouse (“ACH”)
online deposits from his bank accounts at Bank A and Bank B to Freeman’s new
account at Broker A.
19. The two attempted deposits of $100,000 and $20,000 from Bank A
did not process because Freeman’s account at Bank A, which lacked sufficient
funds to cover the deposits, was frozen due to Freeman previously trying to deposit
altered checks into the account.
20. As a result, Broker A also did not process Freeman’s attempted
$20,000 deposit from Bank B.
21. Freeman did not purchase any securities in his Broker A account.
22. On November 3, 2023, Freeman opened six accounts in his name at
Broker B, using an application on which he listed his annual income as $100,001
or more and his net worth between $100,001 and $500,000.

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23. He immediately attempted to make six online electronic fund transfer
deposits, totaling $392,000, into his new brokerage accounts at Broker B.
24. However, Freeman’s associated Bank A account again lacked
sufficient funds to cover the deposits, and the account had already been
frozen by the bank.  As a result, Freeman’s attempted bogus deposits at
Broker B were returned for insufficient funds, and he did not purchase any
securities at Broker B in November 2023.

25. On November 11, 2023, Freeman opened a brokerage account
at Broker C, submitting an application on which he claimed a pretax annual
income of $465,000 and a liquid net worth of $500,000.

26. Freeman then attempted to transfer a total of $51,000 from his
two Broker D accounts to Broker C, but Broker C rejected the transfers
because Freeman’s Broker D accounts, opened ten days earlier on November
1, 2023, lacked funds to cover the transfers.
27. As a result, Freeman did not purchase any securities at Broker
C in November 2023.
28. Subsequently, on December 1, 2023, Freeman opened a second
account at Broker C.

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29. He then attempted to deposit into his account at Broker C a
$35,000 ACH deposit from his account at Broker E, which Freeman had
opened on or around November 20, 2023.
30.  However, Broker C rejected Freeman’s attempted $35,000
deposit from Broker E because Broker C already had flagged Freeman’s
name for potential fraud.
31. Freeman did not purchase any securities at Broker C in
December 2023.
32. On November 27, 2023, Freeman attempted an ACH deposit of
$50,000 from his Bank C account to a brokerage account at Broker F that
Freeman applied to open on November 26, 2023.
33. However, Freeman’s account at Bank C was unfunded and the
attempted deposit was returned.  Freeman did not purchase any securities in
his Broker F account in November 2023.
34. Similarly, between November 28 and November 29, 2023,
Freeman attempted a mobile deposit of four paper checks totaling $89,000
from his Bank C account into two of his brokerage accounts at Broker E.
35. Freeman also sought to deposit a $30,000 paper check from his
account at Bank D, into one of his Broker E accounts.

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36. However, all of Freeman’s attempted deposits at Broker E were
returned because his Bank C and Bank D accounts lacked sufficient funds to
cover the deposits.
37. Freeman did not purchase any securities in his Broker E
accounts in November 2023 or December 2023.
38. The following chart summarizes Freeman’s fraudulent 2023 deposits:

Customer
Name
Broker-
Dealer
Time
Period
Total
Deposits
Rejected
Bank
Balance
at Time
of
Deposits
Security
Purchases
After
Deposits
Net Trading
Gain/(Loss)
Freeman Broker A Nov.
2023
$140,000 $0 None None
Freeman Broker B Nov.
2023
$392,000      $0      None      None
Freeman Broker C Nov.
2023
$86,000 $0 None None
Freeman Broker E Nov.
2023
$119,000      $0      None      None
Freeman Broker F Nov.
2023
$50,000 $0 None None
Totals: $787,000                           None                           None

Freeman’s Free-Riding Efforts in Early 2024 Expand to
Include Accounts in the Names of His Two Aunts

39. Between January 10 and January 12, 2024, Freeman opened two new
Merrill Lynch brokerage accounts in the name of Aunt 1, the 57-year-old disabled
aunt who lives with Freeman and Freeman’s mother.

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40. The accounts in the name of Aunt 1 were opened using the same
phone number that Freeman had previously provided to open brokerage accounts
in his name at Broker F and later Broker G, and for a subsequent job application at
the pork-processing facility where he now works.  The applications for the
accounts in the name of Aunt 1 also included orders for checkbooks which were
mailed to the house where Aunt 1 lives with Freeman, who also had ordered
checks for his own Broker F brokerage account when he applied to open the
account in November 2023.
41. Mobile check deposits signed by Freeman were then submitted for
deposit into Aunt 1’s two, newly-created Broker E accounts, consisting of three
checks totaling $74,000 written from Freeman’s Bank C bank account, and another
check totaling $5,000 from Freeman’s Bank D account.
42. All of the deposits into Aunt 1’s accounts were returned because
Freeman’s bank accounts were either closed or lacked funds to cover the deposits;
no securities were purchased in those two Broker E accounts.
43.   On January 13, 2024, Freeman opened two new Broker B brokerage
accounts, applying for joint accounts under his name and the name of Aunt 1.
44. The application once again listed a phone number for Aunt 1 that was
identical to the number that Freeman used to open his other brokerage accounts
and on his job application at the pork-processing facility.

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45. The Broker B application also listed Aunt 1 as a driver who was
employed by Freeman’s delivery company, Maxnificent Carriers, despite Aunt 1
being disabled and unemployed during the relevant time period.
46. On January 18, 2024, Broker B approved the joint accounts, and
Freeman wrote two $100,000 checks from his brokerage account at Broker E to
Aunt 1 as payee.  These checks were then deposited at Broker B with one going
into each of the joint brokerage accounts.
47. Both checks were later returned for insufficient funds on January 18,
2024 because Freeman’s brokerage account at Broker E was closed.  However, the
immediate access credit provided by Broker B was used by Freeman to purchase a
total of $35,542.33 in securities in one of Freeman and Aunt 1’s joint accounts at
Broker B.  Before Freeman’s deposit was returned, however, he sold the positions
in the joint account for a net loss, resulting in a net debit balance of $769.20.
48. On January 13, 2024, Freeman opened four new brokerage accounts
opened solely in Aunt 1’s name at Broker B (the “Aunt 1 Broker B Accounts”).  In
connection with the account openings, paperwork was submitted to Broker B
providing permission, purportedly by Aunt 1 through an electronic signature, for
Freeman to serve as Aunt 1’s agent.
49. Between January 16 and January 22, 2024, Freeman deposited into
four of the Aunt 1 Broker B Accounts a total of $1,974,000 in checks written from

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Freeman’s closed brokerage account at Broker E.  Before the checks reversed,
Freeman used Broker B’s immediate access credit for those accounts to buy a total
of $336,913.37 in securities, including the stock of several of the same companies
that one of the Freeman and Aunt 1 joint accounts had also bought.
50. One of the Aunt 1 Broker B Accounts came with a debit card, which
was able to be used for transactions based on: (i) the then-pending bogus deposits
made between January 16 and January 22, 2024, consisting of checks written by
Freeman to Aunt 1 totaling $390,000 for that account, and (ii) subsequent trading
profits made through free-riding transactions in the other Aunt 1 Broker B
Accounts.
51. Between January 17 and January 22, 2024, while Freeman was
serving as “agent” to the Aunt 1 Broker B Accounts, the debit card in Aunt 1’s
name was used to make $1,506 in ATM cash withdrawals, including fees, as well
as $2,667.10 in purchases.  The debit card transactions included utility payments
for a phone, a Roku Channel television bill, an electricity account, and restaurant
and shopping charges, including $236.13 at a body piercing studio and $657.45 at
a motorsports store.
52. To pay off the debit card balance at the end of January 2024, Freeman
transferred $4,173.10 in free-riding profits made in the other Aunt 1 Broker B
Accounts to Aunt 1’s account with the debit card.  Those transfers left the debit

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card balance at $0 but, in combination with other net trading losses, resulted in
Aunt 1’s overall portfolio for the other Aunt 1 Broker B Accounts holding a
collective debit balance of $3,992.50, which remains unpaid.
53. On January 24, 2024, Freeman opened two new brokerage accounts at
Broker A in Aunt 1’s name, again using applications listing Aunt 1 as a driver for
Maxnificent Carriers and listing the phone number Freeman used for his own
accounts and personal employment.  The Broker A application also falsely stated
Aunt 1 had an income of more than $250,000 and a net worth between $250,000
and $499,999.  One account was linked to a Broker E brokerage account in Aunt
1’s name, while the other account was linked to a Bank C account in Freeman’s
name.
54. Freeman signed and deposited two checks totaling $100,000 into the
new Broker A accounts in Aunt 1’s name; however, the checks were returned for
insufficient funds because Freeman had written them from his closed brokerage
accounts at Broker E.
55. Also, on January 24, 2024, two transfers were attempted from Aunt
1’s Broker B Accounts to her new Broker A accounts, but both attempts—totaling
$130,000—failed because of a lack of funds in those accounts.  No securities were
ever purchased in Aunt 1’s accounts at Broker A.

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56.  On January 25, 2024, Freeman opened two new accounts at Broker B
in the name of Aunt 2 - Freeman’s other aunt - a 55-year-old who lived on the
same street with other family members in Lake Waccamaw, North Carolina.
57. Similar to the applications for the Aunt 1 accounts, the new
applications for the two accounts in Aunt 2’s name contained the phone number
and email address that Freeman used for his own brokerage accounts and on his
work application at the pork-processing facility.
58. On the same day the accounts opened at Broker B, two checks totaling
$200,000 were written from Aunt 1’s account at Broker E to Aunt 2 and deposited
into Aunt 2’s accounts at Broker B.  However, those checks were returned because
Aunt 1’s account at Broker E had been closed.  No securities were purchased in
Aunt 2’s accounts at Broker B.
59. On February 2, 2024, Freeman opened two brokerage accounts in his
name at Broker G.  On one application, Freeman claimed more than $250,000 in
assets and a net worth between $250,00 and $500,000, while claiming on the other
application that his net worth was between $500,00 and $1 million.
60. Between February 7 and February 12, 2024, Freeman deposited
checks totaling $1,399,000 into his Broker G accounts.  All of the checks were
returned for insufficient funds between February 7 and 14, 2024, because they

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were written from closed brokerage accounts at Broker E either in the name of
Freeman or Aunt 1.
61. Before the checks were returned, however, Freeman was able to use
the immediate access credit provided by Broker G to buy a total of $516,631.34 in
securities.  Although Broker G cancelled the purchases after the deposits reversed,
Freeman’s accounts incurred net losses totaling $701.56 that Freeman did not pay.
62. The following chart summarizes the activity in 2024 in the accounts
held in the names of Freeman, Aunt 1, and Aunt 2, as well as the joint accounts of
Freeman and Aunt 1:
Customer
Name(s)
Broker-
Dealer
Time
Period
Total
Deposits
Rejected
Bank
Balance at
Time of
Deposits
Security
Purchases
After
Deposits
Net
Trading
Gain/(Loss)
Aunt 1 Broker E Jan. 2024 $79,000 $0 None None
Freeman/Aunt
1 (joint)
Broker B Jan. 2024 $200,000 $0 $35,542.33 -$769.20
Aunt 1
(Freeman as
Agent)
Broker B Jan. 2024 $1,974,000 $0 $336,913.37 -$3,992.50
Aunt 1 Broker A Jan. 2024 $230,000 $0 None None
Freeman Broker G Feb. 2024 $1,399,000 $0 $516,631.34 -$701.56
Aunt 2 Broker B Jan. 2024 $200,000 $0 None None
Totals: $4,082,000 $889,087.04 -$5,463.26

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COUNT I- FRAUD
(Violation of Section 10(b) of the Exchange Act and Rule 10b-5 thereunder)
63. The SEC re-alleges and incorporates by reference Paragraph Nos. 1
through 62.
64. Freeman, by engaging in the conduct described above, directly or
indirectly, in connection with the purchase or sale of securities, by use of means or
instrumentalities of interstate commerce, or of the mails, and acting with scienter:
a. Employed devices, schemes, or artifices to defraud;

b. Made untrue statements of material facts or omitted to state material
facts necessary in order to make the statements made, in the light of
the circumstances under which they were made, not misleading; and

c. Engaged in acts, practices, or courses of business which operated or
would operate as a fraud or deceit upon other persons, including
purchasers of securities.

65. By reason of the foregoing, Freeman violated, and unless restrained
and enjoined will continue to violate, Section 10(b) of the Exchange Act [15
U.S.C. § 78j(b)] and Rule 10b-5 thereunder [17 C.F.R. § 240.10b-5].
PRAYER FOR RELIEF
          WHEREFORE,          the          Commission          respectfully prays for:
I.
  Findings of fact and conclusions of law pursuant to Rule 52 of the Federal
Rules of Civil Procedure, finding that Defendant committed the violations alleged.

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II.
An order permanently restraining and enjoining Defendant, and his officers,
agents, servants, employees, and attorneys from the violations alleged herein.
III.
 An order, pursuant to Sections 21(d)(1) and 21(d)(5) of the Exchange Act
[15 U.S.C. §§ 78u(d)(1), (3)], that permanently enjoins Defendant from opening a
brokerage account without first providing to the relevant brokerage firm(s) a copy
of the Commission’s filed complaint in this matter and any judgment that the
Commission may obtain against him in this matter.
IV.
An order of disgorgement of all ill-gotten gains received by Defendant as a
result of his unlawful conduct plus prejudgment interest thereon pursuant to
Sections 21(d)(3), 21(d)(5), and 21(d)(7) of the Exchange Act [15 U.S.C. §§
78u(d)(3), 78u(d)(5), and 78u(d)(7)].
V.
An order for Defendant to pay a civil monetary penalty pursuant to Section
21(d) of the Exchange Act [15 U.S.C. § 78u(d)].

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VI.
Retain jurisdiction of this action in accordance with the principles of equity
and the Federal Rules of Civil Procedure in order to implement and carry out the
terms of all orders and decrees that may be entered, or to entertain any suitable
application or motion for additional relief within the jurisdiction of this Court.
VII.
Grant such other and further relief as this Court may determine to be just,
equitable, and necessary.
JURY TRIAL DEMAND
 The SEC hereby demands a trial by jury on all issues triable of right.

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Dated:   September 19, 2025

      Respectfully submitted,

  /s/ Paul Kim
           Paul Kim
 Senior Trial Counsel
 Georgia Bar No. 457868
      [email protected]

M. Graham Loomis
Regional Trial Counsel
Georgia Bar No. 457868
[email protected]

                                                            Attorneys          for          Plaintiff
United States SECURITIES AND
EXCHANGE COMMISSION
950 E. Paces Ferry Road NE
Suite 900
Atlanta,          GA          30326
Tel: (404) 842-7600
Fax: [email protected]

Local Rule 83.1 Counsel

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UNITED STATES DISTRICT COURT 
EASTERN DISTRICT OF NORTH CAROLINA 

SOUTHERN DIVISION 
 
  
SECURITIES AND EXCHANGE 
COMMISSION, 

 

  
                                     Plaintiff,  
  
                   v. Civil Action File No. 

__________________ 
         
AARON O’BRIAN FREEMAN,   
 JURY DEMAND 
                                      Defendant. 
 

 

  
 

COMPLAINT FOR INJUNCTIVE AND OTHER RELIEF 

Plaintiff Securities and Exchange Commission (the “SEC” or 

“Commission”) files this Complaint for injunctive and other relief and alleges as 

follows:  

OVERVIEW  

1. Between January 2024 and February 2024, Defendant Aaron O’Brian 

Freeman (“Freeman”), a resident of Lake Waccamaw, North Carolina, engaged in a 

“free-riding” scheme involving multiple brokerage accounts that he controlled, 

including ones he opened in the names of two relatives, one of whom is disabled.  

2. “Free-riding” schemes involve a brokerage customer trading securities 

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without having sufficient funds to pay for the trading.  Such schemes may include 

taking advantage of the “immediate access” or “instant deposit” credit extended by 

certain broker-dealers in advance of incoming fund deposits settling into the 

brokerage account, and buying and selling securities with the hope of withdrawing 

trading profits before the broker-dealers discover the deposits to be fraudulent.   

3. Freeman engaged in his scheme by making fraudulent deposits and 

transfers into brokerage accounts from bank or other securities accounts he knew 

were closed or lacked sufficient funds, and then seeking to immediately trade on or 

withdraw funds from the brokerage accounts before the recipient broker-dealers 

discovered that the deposited amounts were fraudulent.   

4. In total, Freeman initiated nearly $3.5 million in unfunded deposits, 

made securities purchases totaling $889,087.04 using the immediate credit extended 

by the broker-dealers, and spent approximately $4,000 in debit card payments on a 

debit card received from one of the recipient broker-dealers.  Each broker-dealer 

ultimately discovered the scheme, froze Freeman’s access to the accounts, reversed 

the deposits, and liquidated the positions.  Nevertheless, they suffered a total net loss 

of at least $5,463.26.   

5. Through his misconduct, Freeman violated Section 10(b) of the 

Securities Exchange Act of 1934 and Rule 10b-5 thereunder. 

6. By this action, the SEC seeks permanent injunctive relief, 

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disgorgement of ill-gotten gains plus prejudgment interest, and civil penalties. 

DEFENDANT AND OTHER RELEVANT PARTIES  

7. Defendant Aaron O’Brian Freeman, 31, is a resident of Lake 

Waccamaw, North Carolina. Freeman’s known bank accounts during the relevant 

time period reflected little to no deposits or savings on a month-to-month basis.  

Upon information and belief, Freeman had no significant source of income during 

the relevant time period.    

8. Maxnificent Carriers, LLC (“Maxnificent Carriers”) purported to be 

a North Carolina courier and delivery service organized by Freeman in 2022.  Per 

applications to brokerage firms submitted by Freeman for that entity, Freeman 

claimed he was earning $250,000 annually through Maxnificent Carriers.  Upon 

information and belief, the company did not engage in any substantial business 

activities consistent with that reported income.  Following its organization, 

Maxnificent Carriers failed to file any annual report.  

9. Aunt 1, age 57, of Lake Waccamaw, North Carolina, is Freeman’s 

disabled aunt who lives with Freeman and Freeman’s mother, who is Aunt 1’s 

sister.    

10. Aunt 2, age 55, of Lake Waccamaw, North Carolina, is another one of 

Freeman’s aunts who lives on the same road as Freeman and Aunt 1.  

  

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JURISDICTION AND VENUE 
 
11. The SEC brings this action pursuant to Sections 21(d), 21(e), and 27 

of the Exchange Act [15 U.S.C. §§ 78u(d), 78u(e), and 78aa]. 

12. Freeman, directly or indirectly, made use of the means and 

instrumentalities of interstate commerce or of the mails in connection with the acts, 

transactions, practices, and courses of business alleged in this Complaint, including 

but not limited to, submitting fraudulent brokerage applications and online deposits 

via the internet.  

13. Venue is proper in this District pursuant to Section 27(a) of the 

Exchange Act [15 U.S.C. § 78aa(a)].  During the relevant time period, Freeman 

has been and continues to be a resident of Lake Waccamaw, North Carolina, in 

Columbus County, North Carolina.  A substantial number of the acts, transactions, 

practices, and courses of business that form the basis of the violations alleged in 

this Complaint occurred in this District.  

Freeman Begins His Initial Free-Riding Efforts Through  
Brokerage Accounts Opened in His Name in November 2023  

 

14. Freeman’s initial free-riding efforts began at least as early as November 

2023. 

15. Such initial “free-riding” began with Freeman opening personal 

brokerage accounts in his name. 

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16. Freeman then submitted a series of bogus deposits and account 

transfers, totaling $787,000, to five broker-dealers. 

17. On November 3, 2023, Freeman submitted an online application and 

opened a brokerage account at Broker A on which he claimed an income of more 

than $250,000 from his purported delivery business, Maxnificent Carriers, and a 

net worth between $500,000 and $999,999.   

18. Freeman then initiated $140,000 in automated clearinghouse (“ACH”) 

online deposits from his bank accounts at Bank A and Bank B to Freeman’s new 

account at Broker A.   

19. The two attempted deposits of $100,000 and $20,000 from Bank A 

did not process because Freeman’s account at Bank A, which lacked sufficient 

funds to cover the deposits, was frozen due to Freeman previously trying to deposit 

altered checks into the account.   

20. As a result, Broker A also did not process Freeman’s attempted 

$20,000 deposit from Bank B.   

21. Freeman did not purchase any securities in his Broker A account. 

22. On November 3, 2023, Freeman opened six accounts in his name at 

Broker B, using an application on which he listed his annual income as $100,001 

or more and his net worth between $100,001 and $500,000.   

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23. He immediately attempted to make six online electronic fund transfer 

deposits, totaling $392,000, into his new brokerage accounts at Broker B.  

24. However, Freeman’s associated Bank A account again lacked 

sufficient funds to cover the deposits, and the account had already been 

frozen by the bank.  As a result, Freeman’s attempted bogus deposits at 

Broker B were returned for insufficient funds, and he did not purchase any 

securities at Broker B in November 2023. 

25. On November 11, 2023, Freeman opened a brokerage account 

at Broker C, submitting an application on which he claimed a pretax annual 

income of $465,000 and a liquid net worth of $500,000.   

26. Freeman then attempted to transfer a total of $51,000 from his 

two Broker D accounts to Broker C, but Broker C rejected the transfers 

because Freeman’s Broker D accounts, opened ten days earlier on November 

1, 2023, lacked funds to cover the transfers.   

27. As a result, Freeman did not purchase any securities at Broker 

C in November 2023.   

28. Subsequently, on December 1, 2023, Freeman opened a second 

account at Broker C. 

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29. He then attempted to deposit into his account at Broker C a 

$35,000 ACH deposit from his account at Broker E, which Freeman had 

opened on or around November 20, 2023. 

30.  However, Broker C rejected Freeman’s attempted $35,000 

deposit from Broker E because Broker C already had flagged Freeman’s 

name for potential fraud. 

31. Freeman did not purchase any securities at Broker C in 

December 2023. 

32. On November 27, 2023, Freeman attempted an ACH deposit of 

$50,000 from his Bank C account to a brokerage account at Broker F that 

Freeman applied to open on November 26, 2023.   

33. However, Freeman’s account at Bank C was unfunded and the 

attempted deposit was returned.  Freeman did not purchase any securities in 

his Broker F account in November 2023. 

34. Similarly, between November 28 and November 29, 2023, 

Freeman attempted a mobile deposit of four paper checks totaling $89,000 

from his Bank C account into two of his brokerage accounts at Broker E.   

35. Freeman also sought to deposit a $30,000 paper check from his 

account at Bank D, into one of his Broker E accounts. 

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36. However, all of Freeman’s attempted deposits at Broker E were 

returned because his Bank C and Bank D accounts lacked sufficient funds to 

cover the deposits. 

37. Freeman did not purchase any securities in his Broker E 

accounts in November 2023 or December 2023.   

38. The following chart summarizes Freeman’s fraudulent 2023 deposits: 

 

Customer 
Name 

Broker-
Dealer 

Time 
Period 

Total 
Deposits 
Rejected  

Bank 
Balance 
at Time 
of 
Deposits 

Security 
Purchases 
After 
Deposits 

Net Trading 
Gain/(Loss)  

Freeman Broker A Nov. 
2023 

$140,000 $0 None None 

Freeman Broker B Nov. 
2023 

$392,000 $0 None None 

Freeman Broker C Nov. 
2023 

$86,000 $0 None None 

Freeman Broker E Nov. 
2023 

$119,000 $0 None None 

Freeman Broker F Nov. 
2023 

$50,000 $0 None None 

Totals: $787,000 None None 
 

Freeman’s Free-Riding Efforts in Early 2024 Expand to  
Include Accounts in the Names of His Two Aunts 

 
39. Between January 10 and January 12, 2024, Freeman opened two new 

Merrill Lynch brokerage accounts in the name of Aunt 1, the 57-year-old disabled 

aunt who lives with Freeman and Freeman’s mother.   

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40. The accounts in the name of Aunt 1 were opened using the same 

phone number that Freeman had previously provided to open brokerage accounts 

in his name at Broker F and later Broker G, and for a subsequent job application at 

the pork-processing facility where he now works.  The applications for the 

accounts in the name of Aunt 1 also included orders for checkbooks which were 

mailed to the house where Aunt 1 lives with Freeman, who also had ordered 

checks for his own Broker F brokerage account when he applied to open the 

account in November 2023. 

41. Mobile check deposits signed by Freeman were then submitted for 

deposit into Aunt 1’s two, newly-created Broker E accounts, consisting of three 

checks totaling $74,000 written from Freeman’s Bank C bank account, and another 

check totaling $5,000 from Freeman’s Bank D account.   

42. All of the deposits into Aunt 1’s accounts were returned because 

Freeman’s bank accounts were either closed or lacked funds to cover the deposits; 

no securities were purchased in those two Broker E accounts. 

43.   On January 13, 2024, Freeman opened two new Broker B brokerage 

accounts, applying for joint accounts under his name and the name of Aunt 1.  

44. The application once again listed a phone number for Aunt 1 that was 

identical to the number that Freeman used to open his other brokerage accounts 

and on his job application at the pork-processing facility.   

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45. The Broker B application also listed Aunt 1 as a driver who was 

employed by Freeman’s delivery company, Maxnificent Carriers, despite Aunt 1 

being disabled and unemployed during the relevant time period.  

46. On January 18, 2024, Broker B approved the joint accounts, and 

Freeman wrote two $100,000 checks from his brokerage account at Broker E to 

Aunt 1 as payee.  These checks were then deposited at Broker B with one going 

into each of the joint brokerage accounts.   

47. Both checks were later returned for insufficient funds on January 18, 

2024 because Freeman’s brokerage account at Broker E was closed.  However, the 

immediate access credit provided by Broker B was used by Freeman to purchase a 

total of $35,542.33 in securities in one of Freeman and Aunt 1’s joint accounts at 

Broker B.  Before Freeman’s deposit was returned, however, he sold the positions 

in the joint account for a net loss, resulting in a net debit balance of $769.20. 

48. On January 13, 2024, Freeman opened four new brokerage accounts 

opened solely in Aunt 1’s name at Broker B (the “Aunt 1 Broker B Accounts”).  In 

connection with the account openings, paperwork was submitted to Broker B 

providing permission, purportedly by Aunt 1 through an electronic signature, for 

Freeman to serve as Aunt 1’s agent.   

49. Between January 16 and January 22, 2024, Freeman deposited into 

four of the Aunt 1 Broker B Accounts a total of $1,974,000 in checks written from 

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Freeman’s closed brokerage account at Broker E.  Before the checks reversed, 

Freeman used Broker B’s immediate access credit for those accounts to buy a total 

of $336,913.37 in securities, including the stock of several of the same companies 

that one of the Freeman and Aunt 1 joint accounts had also bought.   

50. One of the Aunt 1 Broker B Accounts came with a debit card, which 

was able to be used for transactions based on: (i) the then-pending bogus deposits 

made between January 16 and January 22, 2024, consisting of checks written by 

Freeman to Aunt 1 totaling $390,000 for that account, and (ii) subsequent trading 

profits made through free-riding transactions in the other Aunt 1 Broker B 

Accounts.  

51. Between January 17 and January 22, 2024, while Freeman was 

serving as “agent” to the Aunt 1 Broker B Accounts, the debit card in Aunt 1’s 

name was used to make $1,506 in ATM cash withdrawals, including fees, as well 

as $2,667.10 in purchases.  The debit card transactions included utility payments 

for a phone, a Roku Channel television bill, an electricity account, and restaurant 

and shopping charges, including $236.13 at a body piercing studio and $657.45 at 

a motorsports store.   

52. To pay off the debit card balance at the end of January 2024, Freeman 

transferred $4,173.10 in free-riding profits made in the other Aunt 1 Broker B 

Accounts to Aunt 1’s account with the debit card.  Those transfers left the debit 

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card balance at $0 but, in combination with other net trading losses, resulted in 

Aunt 1’s overall portfolio for the other Aunt 1 Broker B Accounts holding a 

collective debit balance of $3,992.50, which remains unpaid.  

53. On January 24, 2024, Freeman opened two new brokerage accounts at 

Broker A in Aunt 1’s name, again using applications listing Aunt 1 as a driver for 

Maxnificent Carriers and listing the phone number Freeman used for his own 

accounts and personal employment.  The Broker A application also falsely stated 

Aunt 1 had an income of more than $250,000 and a net worth between $250,000 

and $499,999.  One account was linked to a Broker E brokerage account in Aunt 

1’s name, while the other account was linked to a Bank C account in Freeman’s 

name.   

54. Freeman signed and deposited two checks totaling $100,000 into the 

new Broker A accounts in Aunt 1’s name; however, the checks were returned for 

insufficient funds because Freeman had written them from his closed brokerage 

accounts at Broker E.   

55. Also, on January 24, 2024, two transfers were attempted from Aunt 

1’s Broker B Accounts to her new Broker A accounts, but both attempts—totaling 

$130,000—failed because of a lack of funds in those accounts.  No securities were 

ever purchased in Aunt 1’s accounts at Broker A. 

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56.  On January 25, 2024, Freeman opened two new accounts at Broker B 

in the name of Aunt 2 - Freeman’s other aunt - a 55-year-old who lived on the 

same street with other family members in Lake Waccamaw, North Carolina.   

57. Similar to the applications for the Aunt 1 accounts, the new 

applications for the two accounts in Aunt 2’s name contained the phone number 

and email address that Freeman used for his own brokerage accounts and on his 

work application at the pork-processing facility.   

58. On the same day the accounts opened at Broker B, two checks totaling 

$200,000 were written from Aunt 1’s account at Broker E to Aunt 2 and deposited 

into Aunt 2’s accounts at Broker B.  However, those checks were returned because 

Aunt 1’s account at Broker E had been closed.  No securities were purchased in 

Aunt 2’s accounts at Broker B.   

59. On February 2, 2024, Freeman opened two brokerage accounts in his 

name at Broker G.  On one application, Freeman claimed more than $250,000 in 

assets and a net worth between $250,00 and $500,000, while claiming on the other 

application that his net worth was between $500,00 and $1 million.   

60. Between February 7 and February 12, 2024, Freeman deposited 

checks totaling $1,399,000 into his Broker G accounts.  All of the checks were 

returned for insufficient funds between February 7 and 14, 2024, because they 

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14 
 

were written from closed brokerage accounts at Broker E either in the name of 

Freeman or Aunt 1.   

61. Before the checks were returned, however, Freeman was able to use 

the immediate access credit provided by Broker G to buy a total of $516,631.34 in 

securities.  Although Broker G cancelled the purchases after the deposits reversed, 

Freeman’s accounts incurred net losses totaling $701.56 that Freeman did not pay. 

62. The following chart summarizes the activity in 2024 in the accounts 

held in the names of Freeman, Aunt 1, and Aunt 2, as well as the joint accounts of 

Freeman and Aunt 1: 

Customer 
Name(s) 

Broker-
Dealer 

Time 
Period 

Total 
Deposits 
Rejected  

Bank 
Balance at 
Time of 
Deposits 

Security 
Purchases 
After 
Deposits 

Net 
Trading 
Gain/(Loss)  

Aunt 1 Broker E Jan. 2024 $79,000 $0 None None 
Freeman/Aunt 
1 (joint) 

Broker B Jan. 2024 $200,000 $0 $35,542.33 -$769.20 

Aunt 1 
(Freeman as 
Agent) 

Broker B Jan. 2024 $1,974,000 $0 $336,913.37 -$3,992.50 

Aunt 1 Broker A Jan. 2024 $230,000 $0 None None 
Freeman Broker G Feb. 2024 $1,399,000 $0 $516,631.34 -$701.56 
Aunt 2 Broker B Jan. 2024 $200,000 $0 None None 

Totals: $4,082,000 $889,087.04 -$5,463.26 
 

 

 

 

 

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15 
 

COUNT I- FRAUD 

(Violation of Section 10(b) of the Exchange Act and Rule 10b-5 thereunder) 

63. The SEC re-alleges and incorporates by reference Paragraph Nos. 1 

through 62. 

64. Freeman, by engaging in the conduct described above, directly or 

indirectly, in connection with the purchase or sale of securities, by use of means or 

instrumentalities of interstate commerce, or of the mails, and acting with scienter: 

a. Employed devices, schemes, or artifices to defraud; 
 

b. Made untrue statements of material facts or omitted to state material 
facts necessary in order to make the statements made, in the light of 
the circumstances under which they were made, not misleading; and 

 
c. Engaged in acts, practices, or courses of business which operated or 

would operate as a fraud or deceit upon other persons, including 
purchasers of securities. 

 
65. By reason of the foregoing, Freeman violated, and unless restrained 

and enjoined will continue to violate, Section 10(b) of the Exchange Act [15 

U.S.C. § 78j(b)] and Rule 10b-5 thereunder [17 C.F.R. § 240.10b-5]. 

PRAYER FOR RELIEF 

 WHEREFORE, the Commission respectfully prays for: 

I. 

  Findings of fact and conclusions of law pursuant to Rule 52 of the Federal 

Rules of Civil Procedure, finding that Defendant committed the violations alleged. 

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II. 

An order permanently restraining and enjoining Defendant, and his officers, 

agents, servants, employees, and attorneys from the violations alleged herein. 

III. 

 An order, pursuant to Sections 21(d)(1) and 21(d)(5) of the Exchange Act 

[15 U.S.C. §§ 78u(d)(1), (3)], that permanently enjoins Defendant from opening a 

brokerage account without first providing to the relevant brokerage firm(s) a copy 

of the Commission’s filed complaint in this matter and any judgment that the 

Commission may obtain against him in this matter. 

IV. 

An order of disgorgement of all ill-gotten gains received by Defendant as a 

result of his unlawful conduct plus prejudgment interest thereon pursuant to 

Sections 21(d)(3), 21(d)(5), and 21(d)(7) of the Exchange Act [15 U.S.C. §§ 

78u(d)(3), 78u(d)(5), and 78u(d)(7)]. 

V. 

An order for Defendant to pay a civil monetary penalty pursuant to Section 

21(d) of the Exchange Act [15 U.S.C. § 78u(d)]. 

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VI. 

Retain jurisdiction of this action in accordance with the principles of equity 

and the Federal Rules of Civil Procedure in order to implement and carry out the 

terms of all orders and decrees that may be entered, or to entertain any suitable 

application or motion for additional relief within the jurisdiction of this Court. 

VII. 

Grant such other and further relief as this Court may determine to be just, 

equitable, and necessary. 

JURY TRIAL DEMAND 

 The SEC hereby demands a trial by jury on all issues triable of right. 

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Dated:   September 19, 2025     

 
 
      Respectfully submitted, 
 

  /s/ Paul Kim 
           Paul Kim 
 Senior Trial Counsel  
 Georgia Bar No. 457868 

      [email protected]  

               
M. Graham Loomis 
Regional Trial Counsel 
Georgia Bar No. 457868 
[email protected] 
 
 
 

      Attorneys for Plaintiff 
United States SECURITIES AND 
EXCHANGE COMMISSION 
950 E. Paces Ferry Road NE 
Suite 900 
Atlanta, GA 30326    
Tel: (404) 842-7600 
Fax: [email protected]  

 
Local Rule 83.1 Counsel 

 
       

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