SEC charges former Tricolor executives with $1.9 billion fraud scheme

The Securities and Exchange Commission today charged Daniel Chu, Jerome Kollar and Ameryn Seibold, the former chief executive officer, chief financial officer and senior director of finance of Tricolor Holdings, LLC, for an alleged multi-year scheme to defraud investors by double pledging subprime auto loans to multiple asset-backed securities offerings.

According to the complaint, from at least 2020 through Tricolor's bankruptcy in September 2025, the company raised more than $1.9 billion through ABS offerings while the defendants made false and misleading representations that the loans in the collateral pools were free and clear of other liens, despite knowing many were or would be double pledged.

The complaint further alleges that the defendants manipulated loan metrics to make non-paying or defaulted loans appear current, thereby qualifying them for inclusion in the securitization pools. At the time of Tricolor's bankruptcy, more than $945 million of principal associated with the ABS offerings remained outstanding and payable to investors.

Filed in the U.S. District Court for the Southern District of New York, the complaint charges violations of the antifraud provisions of the Securities Act of 1933 and the Securities Exchange Act of 1934, includes control-person liability for Chu and aiding and abetting liability for all three defendants, and seeks injunctive relief, disgorgement of ill-gotten gains with prejudgment interest, civil penalties and officer and director bars for Chu and Kollar.

The SEC's action follows parallel criminal charges announced by the U.S. Attorney's Office for the Southern District of New York in December 2025. "We allege that these defendants defrauded investors based on bogus collateral and violated the integrity of our private credit markets," said David Woodcock, director of the SEC's Division of Enforcement.