The Securities and Exchange Commission charged three former executives of Tricolor Holdings on August 18 with securities fraud in connection with a multiyear scheme that led to the $1.9 billion collapse of the Texas-based subprime auto lender. Daniel Chu, the founder and former CEO; Jerome Kollar, the former CFO; and Ameryn Seibold, the former senior director of finance, allegedly defrauded investors through “bogus collateral” and false statements about the company’s financial health.
According to the SEC’s complaint, the executives double-pledged hundreds of millions of dollars of subprime auto loans to multiple asset-backed securities offerings and lenders while misrepresenting that the collateral was free and clear of other liens. From at least 2020 through Tricolor’s bankruptcy filing in September 2025, the company raised more than $1.9 billion through ABS offerings while Chu and Kollar falsely represented to investors that Tricolor’s financial condition was sound, despite knowing the lender faced severe liquidity constraints.
The scheme also involved manipulating loan metrics to make delinquent or uncollectible loans appear current and eligible for securitization pools. In internal communications, executives referred to these ineligible loans as “dead loans” because borrowers were not making payments, yet they reported them to investors as current and included them in collateral pools. By August 2025, Tricolor had pledged approximately $2.2 billion of collateral to lenders and investors but possessed only about $1.4 billion in real collateral—a gap of roughly $800 million in fraudulent pledges.
The SEC’s action follows parallel criminal charges filed by the U.S. Attorney’s Office for the Southern District of New York in December 2025. At that time, Chu and David Goodgame, Tricolor’s former COO, were indicted on bank fraud and wire fraud charges. Kollar and Seibold both pleaded guilty to fraud charges in December and are cooperating with prosecutors. Goodgame pleaded guilty in July 2026.
The fraud unraveled in September 2025 when Fifth Third Bank announced it had discovered alleged fraudulent activity at a commercial borrower—later revealed to be Tricolor—and took a $200 million impairment charge on a loan. Tricolor filed for Chapter 7 bankruptcy liquidation the following day. At the time of the bankruptcy filing, more than $945 million of principal from the ABS offerings remained outstanding and owed to investors. Banks including Fifth Third, JPMorgan Chase, and Barclays each recorded charge-offs exceeding $100 million in connection with Tricolor’s collapse.
SEC Enforcement Director David Woodcock stated in a press release that the agency alleged the defendants “defrauded investors based on bogus collateral and violated the integrity of our private credit markets.” The SEC’s complaint seeks disgorgement of ill-gotten gains, civil penalties, and permanent bars from serving as officers or directors of public companies for Chu and Kollar. The case was filed in the U.S. District Court for the Southern District of New York.
Matthew Schwartz, an attorney for Chu with Boies Schiller Flexner, characterized the SEC’s case as a “rehash” of prior allegations, many of which he said are inaccurate. Chu has pleaded not guilty to all criminal charges and earlier this month successfully challenged a motion to dismiss the top charge of systematic fraud. A lawyer for Seibold declined to comment, and an attorney for Kollar did not respond to requests for comment.
Sources
- SEC — Official press release detailing the charges against Chu, Kollar, and Seibold, the alleged scheme, and remedies sought
- Reuters — Reporting on the SEC lawsuit, executive statements, and defense responses
- CFO Dive — Details on the fraud mechanics, executive compensation tied to securitizations, and the bankruptcy timeline
- U.S. Attorney’s Office, Southern District of New York — Criminal indictment details, guilty pleas, and allegations of collateral double-pledging and bonus extraction
