SEC v. Daniel Chu; Jerome Kollar; Ameryn Seibold — U.S. Securities and Exchange Commission Litigation Release No. 26612, dated August 18, 2026.
SEC charged former executives of Tricolor Holdings LLC with orchestrating a multi-year scheme to defraud investors out of more than $1.9 billion. The executives allegedly double-pledged hundreds of millions of dollars of auto loans and misrepresented the company's financial health to conceal liquidity issues and fund operations, leading to investor losses when the company collapsed.
In Plain English
Imagine you have a box of valuable items (car loans) that you promise to give to one friend (an investor buying bonds). But then, you secretly promise the same box of items to another friend (another investor or lender) to get more money. You also lie about how many items are actually in the box, including some that are broken or worthless. This is what the executives at Tricolor did, leading to massive losses for the people who trusted them.
Disclaimer: all facts are drawn from the SEC's own filings; the claims described are allegations unless and until a court rules or the parties settle, and some cases end in dismissal.
How the Alleged Scheme Worked
- Raise Funds Through ABS Offerings From at least 2020 through September 2025, Tricolor Holdings LLC, through special purpose vehicles, issued nearly $2 billion in asset-backed securities (ABS) notes. These notes were purportedly collateralized by pools of subprime auto loans.
- Misrepresent Collateral Eligibility Defendants Chu and Kollar falsely assured investors that the auto loans in the collateral pools were free and clear of other liens. In reality, with Chu's knowledge, loans were intentionally included that were already pledged to other lenders or ABS offerings.
- Double-Pledge Loans The fraudulent scheme involved the deliberate double-pledging of auto loan receivables. These loans were pledged to multiple ABS offerings and also to separate non-securitized warehouse lending facilities, creating overlapping claims on the same assets.
- Include 'Dead Loans' At Chu's direction, Kollar and Seibold included large quantities of ineligible collateral, such as delinquent loans over 30 or 60 days past due, and loans that should have been charged off as uncollectible ('dead loans').
- Manipulate Loan Status Defendants manipulated various loan metrics to make non-paying or defaulted loans appear current. This allowed them to include these 'dead loans' in the securitization pools, inflating the perceived value of the collateral.
- Conceal Financial Distress Chu and Kollar falsely represented Tricolor's financial condition as sound to investors. They knew the company faced significant liquidity constraints and was struggling to fund operations, masking the growing crisis.
- Fabricate Servicing Reports Kollar and Seibold, with Chu's approval, prepared false monthly servicing reports (MSRs) for warehouse loans. These reports concealed the double-pledging and 'dead loans' by altering delinquency status fields and falsifying VINs.
- Provide False Reports to Lenders Chu and Kollar signed these false MSRs, representing them as 'complete and accurate.' These reports were provided to lenders who also acted as underwriters for the ABS offerings and to at least one lender that invested in the ABS offerings.
- Create Collateral Shortfall By double-pledging collateral and including ineligible loans, Defendants created a hole in Tricolor's collateral base that grew to approximately $800 million, obligating the company to pay interest and principal multiple times on the same loans.
The Enforcement Action
SEC charges former Tricolor executives Daniel Chu, Jerome Kollar, and Ameryn Seibold with fraud for their roles in a scheme to defraud investors out of more than $1.9 billion by double-pledging auto loans and misrepresenting the company's financial health. The SEC seeks injunctive relief, disgorgement with prejudgment interest, civil penalties, and officer and director bars against Chu and Kollar. Parallel criminal charges were announced by the U.S. Attorney's Office for the Southern District of New York.
Named in this action: Daniel Chu, Jerome Kollar, Ameryn Seibold.