SEC Charges Former Tricolor Executives with $1.9 Billion Fraud Leading to Lender's Collapse
The U.S. Securities and Exchange Commission (SEC) announced on August 18, 2026, that it has charged Daniel Chu, Jerome Kollar, and Ameryn Seibold—the former CEO, CFO, and Senior Director of Finance, respectively, of Texas-based Tricolor Holdings, LLC—with fraud. These charges stem from an alleged multi-year scheme to defraud investors, ultimately contributing to the subprime auto lender's $1.9 billion collapse and subsequent bankruptcy in September 2025.
According to the SEC's complaint, filed in the U.S. District Court for the Southern District of New York, the executives engaged in a scheme from at least 2020 to deceive investors by double-pledging hundreds of millions of dollars in subprime auto loans as collateral across multiple asset-backed securities (ABS) offerings and lenders. The complaint further alleges that the defendants made numerous false and misleading representations about Tricolor's financial health, portraying the company as solvent despite their knowledge of its severe liquidity constraints and operational funding struggles. They are also accused of manipulating loan metrics to make non-paying or defaulted loans appear current, thereby making them eligible for inclusion in securitization pools.
At the time of Tricolor's bankruptcy, over $945 million in principal associated with the ABS offerings remained outstanding and payable to investors. This civil action by the SEC runs parallel to criminal charges announced by the U.S. Attorney's Office for the Southern District of New York in December 2025 against Chu, Kollar, and Seibold, with former COO David Goodgame having pleaded guilty to fraud charges in July. David Woodcock, Director of the SEC's Division of Enforcement, emphasized that the defendants allegedly defrauded investors based on “bogus collateral” and compromised the integrity of private credit markets. The SEC seeks injunctive relief, disgorgement of ill-gotten gains, civil penalties, and officer and director bars against Chu and Kollar.
