Key facts
- The SEC has sued former Tricolor CEO Daniel Chu and executives Jerome Kollar and Ameryn Seibold.
- The lawsuit alleges a fraudulent scheme involving misrepresentations about auto loan receivables.
- Investors reportedly lost hundreds of millions of dollars through purchases of asset-backed securities.
- Tricolor filed for Chapter 7 bankruptcy in September 2023.
- Daniel Chu faces a criminal indictment for fraud, to which he has pleaded not guilty.
The U.S. Securities and Exchange Commission (SEC) has filed a lawsuit against former executives of the collapsed used-car seller and subprime lender Tricolor, alleging a fraudulent scheme that defrauded investors.
The lawsuit, filed in the Southern District of New York, names former CEO Daniel Chu and executives Jerome Kollar and Ameryn Seibold. The SEC accuses them of engaging in a fraudulent scheme involving misrepresentations about auto loan receivables. These receivables were allegedly used as collateral to obtain liquidity needed for Tricolor's operations, meet debt covenants, and sustain the business.
According to the court filing, the scheme caused investors to lose hundreds of millions of dollars through their purchases of asset-backed securities between at least 2020 and September 2025. Tricolor filed for Chapter 7 bankruptcy in Texas last year after Fifth Third Bank alerted authorities to alleged fraudulent activity within the company.
Separately, Daniel Chu faces a criminal indictment with eight counts, including bank fraud, securities fraud, wire fraud, and conspiracy. A federal judge recently rejected Chu's request to dismiss the primary charge in this indictment. Chu has pleaded not guilty to all charges, and his trial is scheduled for January 2027.