The Securities and Exchange Commission has charged former executives with Texas-based Tricolor Holdings, LLC, for their roles in an alleged multi-year scheme to defraud investors.
Daniel Chu, Jerome Kollar, and Ameryn Seibold, the former CEO, CFO, and Senior Director of Finance, respectively, for Tricolor, were allegedly part of a scam that pledging hundreds of millions of dollars of subprime auto loans to multiple asset-backed securities (ABS) offerings and lenders.
According to the SEC, between 2020 and September 2025, Tricolor raised more than $1.9 billion through ABS offerings while Tricolor, Chu, and Kolar made false and misleading claims about the lender’s overall financial health to investors. The claims portrayed the company as financially sound despite the company facing significant liquidity constraints and struggling to fund its operations. In offering materials and meetings, Tricolor claimed loans included in the ABS collateral pools were free and clear of any other liens when the defendants knew that many of them had or would soon be double pledged. The complaint alleges that the defendants deceived underwriters and investors, including by manipulating various loan metrics to make non-paying or defaulted loans appear current and eligible for inclusion in securitization pools. More than $945 million of principal associated with the ABS offerings were outstanding and payable to investors at the time of Tricolor bankruptcy, investigators alleged.
“We allege that these defendants defrauded investors based on bogus collateral and violated the integrity of our private credit markets,” David Woodcock, Director of the SEC’s Division of Enforcement, said. “Our team did a tremendous job bringing these charges and we appreciate the assistance of our partners at the Southern District of New York, the FBI and the FDIC Office of Inspector General.”
Chu, Kollar and Seibold were charged with violating antifraud provisions of the Securities Act of 1933, and with the Securities Exchange Act of 1934. Chu was also charges with control person liability. All of the defendants with charged with aiding and abetting liability.
The SEC said it is seeking injunctive relief, disgorgement of ill-gotten gains with prejudgment interest, and civil penalties against all the defendants as well as officer and director bars against Chu and Kollar.