SEC Charges Former Tricolor Executives With Fraud Over $1.9 Billion Collapse

The US Securities and Exchange Commission has charged Daniel Chu, Jerome Kollar and Ameryn Seibold, the former chief executive, chief financial officer and senior director of finance of Texas-based Tricolor Holdings, with fraud. The charges stem from an alleged multi-year scheme to defraud investors by double-pledging hundreds of millions of dollars in subprime auto loans to multiple asset-backed securities offerings and lenders between 2020 and the company’s bankruptcy in September 2025.

According to the SEC’s complaint, Tricolor raised more than $1.9 billion through asset-backed securities offerings during this period. The regulator alleges that Chu, Kollar and the company made numerous false and misleading representations to investors regarding the lender’s overall financial health. Despite knowing that Tricolor was facing significant liquidity constraints and struggling to fund its operations, the defendants portrayed the company as financially sound.

The complaint further alleges that the defendants deceived underwriters and investors by manipulating loan metrics to make non-paying or defaulted loans appear current and eligible for inclusion in securitisation pools. In offering materials and meetings, Tricolor represented that the loans included in the asset-backed securities collateral pools were free and clear of any other liens, even though the defendants knew that many had been or would soon be double-pledged.

At the time of Tricolor’s bankruptcy in September 2025, more than $945 million in principal associated with the asset-backed securities offerings remained outstanding and payable to investors. The SEC’s complaint, filed in the US District Court for the Southern District of New York, charges the defendants with violating the antifraud provisions of the Securities Act of 1933 and the Securities Exchange Act of 1934.

Chu faces additional control person liability, while all three defendants face aiding and abetting liability. The SEC seeks injunctive relief, disgorgement of ill-gotten gains with prejudgment interest and civil penalties against all defendants, as well as officer and director bars specifically against Chu and Kollar.

In a parallel action, the US Attorney’s Office for the Southern District of New York announced criminal charges against Chu, Kollar and Seibold in December 2025. David Woodcock, Director of the SEC’s Division of Enforcement, stated that the defendants defrauded investors based on bogus collateral and violated the integrity of private credit markets, citing assistance from the FBI and the FDIC Office of Inspector General.