The Securities and Exchange Commission filed a civil lawsuit on August 18 against Daniel Chu, founder of Tricolor Holdings, and two former executives, former CFO Jerome Kollar and executive Ameryn Seibold. The complaint, filed in Manhattan federal court, accuses them of defrauding investors through more than $800 million in fabricated auto-loan receivables from 2018 to 2025.

The alleged scheme involved falsified loan data and double-pledging of collateral through asset-backed securitizations. Tricolor operated as both an auto dealership and subprime lender in Texas before filing for Chapter 7 bankruptcy on September 10, 2025. The collapse impacted major banks including JPMorgan and Barclays.

The Department of Justice issued criminal indictments in December 2025. Two executives, including Kollar, have pleaded guilty and agreed to cooperate. Daniel Chu has pleaded not guilty; his trial is scheduled for January 2027. The SEC seeks disgorgement and civil penalties.