SEC Sues Former Tricolor Executives Over $1.9 Billion Investor Fraud Scheme

The U.S. Securities and Exchange Commission (SEC) has sued three former senior executives of Tricolor, alleging they participated in a years-long scheme that misled investors about the financial condition of the Texas-based used-car dealer and subprime auto lender.

The SEC filed charges Tuesday against former Tricolor CEO Daniel Chu, former Chief Financial Officer Jerome Kollar and former Senior Finance Director Ameryn Seibold. Tricolor filed for bankruptcy in September 2025, triggering increased scrutiny of the company's financing practices.

According to the SEC complaint, the executives allegedly deceived investors by using the same subprime auto loans as collateral more than once, effectively double-pledging hundreds of millions of dollars in loans. Regulators claim the conduct compromised the integrity of private credit markets and gave investors a misleading picture of Tricolor's assets and financial strength.

The SEC alleges that the misconduct occurred from at least 2020 through the company's September 2025 bankruptcy. During that period, Tricolor raised more than $1.9 billion from investors through asset-backed securities offerings while its executives allegedly made false or misleading statements about the company's finances.

The civil enforcement action follows parallel criminal charges filed by U.S. prosecutors in December. Chu has pleaded not guilty to all counts in an eight-count criminal indictment.

Matthew Schwartz, an attorney representing Chu at Boies Schiller Flexner, rejected the SEC's allegations, describing the civil case as a repeat of earlier claims that he said contain numerous inaccuracies. He said the defense expects the allegations to receive a full hearing in court.

An attorney representing Seibold declined to comment, while Kollar's lawyer did not immediately respond to a request for comment.

The SEC accused all three former executives of violating federal securities law antifraud provisions. Regulators are seeking financial penalties and the return of allegedly unlawful gains. The agency also wants Chu and Kollar prohibited from serving as officers or directors of public companies.

The legal pressure on Chu intensified earlier this month when a federal judge rejected his attempt to dismiss the leading criminal charge accusing him of systematic fraud connected to Tricolor's collapse.