SEC v. Chu, Kollar and Seibold: the securities fraud complaint

analysisOn August 18, 2026 the U.S. Securities and Exchange Commission sued Daniel Chu, Jerome Kollar and Ameryn Seibold, Tricolor's former chief executive, chief financial officer and senior director of finance, in the U.S. District Court for the Southern District of New York (No. 26-cv-7041). It alleges that from at least 2020 to September 2025 they engaged in a fraudulent scheme that caused investors to lose hundreds of millions of dollars on asset-backed securities issued through Tricolor's securitisation trusts, charges violations of the antifraud provisions of the Securities Act and the Exchange Act, control person liability for Chu under Exchange Act Section 20(a), and aiding and abetting, and seeks injunctions, disgorgement with prejudgment interest, civil penalties and officer-and-director bars against Chu and Kollar; a jury trial is demanded. These are allegations in the SEC's civil complaint; no court has ruled on them, and the retained documents contain no answer from the defendants. The SEC states that its investigation is ongoing, and no ruling or settlement appears in the retained documents. ^{1 2}

analysisThe complaint describes Chu as the founder, controlling shareholder, chief executive officer and chairman of Tricolor Holdings and one of its managers throughout the period; Kollar as its chief financial officer, vice president and secretary; and Seibold as its senior director of finance and director of treasury. It notes that Kollar and Seibold pleaded guilty on or about December 16, 2025, and that Chu was indicted on December 15, 2025 and charged with securities fraud in a superseding indictment on June 24, 2026. The SEC alleges that Chu exercised actual power and control over Tricolor's operations, over the securitisation process for the trusts and over the conduct of Kollar, Seibold and other employees, and that as chief executive, chairman and signatory for the depositor he signed the offering documents, the Form ABS-15G filings and the monthly servicing reports and had final authority over their contents. According to the SEC, Tricolor engaged at least three broker-dealers, which the complaint calls Financial Institutions A, B and C, as underwriters, managers, bookrunners and structuring agents of the securitisations, and the same institutions relied on Tricolor's audits as warehouse lenders; Tricolor's financial statements and its warehouse facilities were audited by separate audit firms. The complaint names neither the institutions nor the audit firms. Like the rest of the complaint, these are the SEC's allegations: no court has ruled on them and no answer from the defendants is retained. ¹

analysisThe SEC alleges that the defendants deliberately double-pledged auto loan receivables to several securitisations and to separate warehouse facilities: with Chu's knowledge and approval, loans already pledged to other lenders or securitisations were put into the collateral pools, and securitised receivables were re-pledged to warehouse facilities, often almost immediately after a securitisation closed, while Chu and Kollar told noteholders that the pooled loans were free of other liens and had not been pledged to anyone else. In a June 17, 2025 email, it says, Kollar told an employee to include the same 3,225 loans as collateral in TAST 2022-1 and TAST 2025-2, and when the employee asked to confirm leaving the 3,225 contracts in both reports, Kollar replied "Yes."; Financial Institution A later identified the same 3,225 loans as double-pledged between the two trusts. According to the complaint, Kollar and Seibold, at Chu's direction, also put ineligible collateral into the pools: loans more than 30 or 60 days past due and loans that should have been charged off, which executives called "dead loans" but reported as current, and fictitious loans created by falsifying loan identifiers including VINs. It alleges that in about 2019 Chu told Kollar to set up an off-the-books entity referred to as "Company 23" to hold dead loans and apply fake payments so that they appeared current, and that in August 2020 a senior executive, whom it does not name, confronted Chu about dead loans in the securitisation pools and Chu admitted they were included because Tricolor lacked enough "clean", unpledged, collateral. No court has ruled on these allegations, and the retained documents hold no answer to them from the defendants. ¹

analysisThe SEC alleges that, with Chu's knowledge and approval, Kollar and Seibold prepared false monthly servicing reports for the warehouse loans that hid double-pledged, dead and delinquent loans by changing delinquency fields, falsifying VINs and adjusting payment terms, and that Chu and Kollar certified them as complete and accurate knowing they went to lenders that were also underwriters of the securitisations and to at least one lender that had invested in them. It quotes internal messages: in July 2021 Kollar told Chu that an auditor should not "tie out" a double-pledged warehouse facility and later called its collateral "garbage, zombie loans"; on July 25, 2022 Chu asked whether they could "work the >60s" and Kollar replied that he and Seibold "can work magic"; on July 28, 2023 Chu asked Kollar to "reconstruct" a lender's borrowing base and warned "they will definitely check for dups"; and in July 2023 Kollar said he would send auditors "the pdf reports" so they would not see the "details". The SEC notes that advance rates on Tricolor's facilities were generally only 70% to 80% of pledged collateral. In six securitisations from early 2023, it says, Tricolor told investors it charged off receivables at 120 days past due or on repossession or sale of the vehicle and paid all insurance and recovery proceeds to the trust, while in practice dead loans stayed in one or more pools or were put into new ones and, at Chu's direction, Tricolor kept recoveries on charged-off loans in whole or part. These too are allegations in the SEC's civil complaint, not rulings, and no answer from the defendants is retained. ¹

analysisThe SEC also alleges that Chu and Kollar manipulated quarterly financial information by deferring wholesale inventory losses and adjusting fair-value models to meet coverage covenants, and booked about $100 million of "bad debt" adjustments to reflect fictitious collateral in connection with the 2022 audit, an adjustment carried into the 2023 to 2025 statements. Some warehouse agreements required a debt service coverage ratio of at least 1.35 to 1; in July 2024 Kollar texted that the second-quarter covenants needed $18.5 million from the fair-value model and $1 million of deferred wholesale losses, and in October 2024 that "We needed $10m [fair value] to make covenants". From at least 2022, the complaint says, Kollar misled auditors and taught Seibold to falsify documents, including borrowing base reports, and Seibold falsified account ledgers and VINs to obtain clean audits; near the collapse Seibold told Chu that 100 account ledgers had to be falsified before an audit could be completed, and in 2025 Seibold received a $25,000 bonus for completing a 2024 audit in which false information was given to auditors. The SEC's allegations on these points have not been ruled on, and the defendants' answer is not in the retained record. ¹

analysisAccording to the SEC, in August 2025 an analyst at Financial Institution E, both a warehouse lender and an investor in several securitisations, found that many loans marked as current showed no reduction in principal for months and told Financial Institution A, a lender on the same facility, whose analysis found $365,497,106.65 of double-pledged principal across the seven outstanding trusts, about $49 million of it in TAST 2025-2; on or about August 13, 2025 it contacted Tricolor. The complaint does not name the institutions. The SEC alleges that Chu then had the executives form a chat group, that Kollar proposed WhatsApp because it was more secure and easier to conceal and Chu named it "911", and that when investigations became likely Chu and two senior executives agreed to delete the chats, Chu called Kollar to confirm his were deleted and checked some executives' phones. It describes calls recorded by a senior executive from August 17, 2025, on which Chu proposed blaming the discrepancies on a "system issue" and fabricated deferment policies and suggested putting more bad collateral into a new securitisation, which never took place; on August 19 he recounted telling Financial Institution E that "if we were trying to commit fraud, we wouldn't be so stupid as to keep the same balances". From August 19 Chu recorded some calls himself and, the SEC alleges, feigned ignorance, telling a warehouse lender on August 27 that he had learned of the double-pledging from Kollar. The calls were recorded by participants and the quotations are the SEC's transcription. All of this is alleged in the SEC complaint; no court has ruled on it, and no answer from the defendants is retained. ¹

analysisBy late August 2025, the SEC says, Tricolor's liabilities greatly exceeded its assets; it had defaulted on payments to its lenders and breached numerous covenants, and the lenders terminated funding and called the debt on the warehouse facilities, with about $800 million of loans outstanding. The complaint cites three estimates of the shortfall: a forensic firm retained by the bankruptcy trustee concluded that double-pledging and fictitious loans inflated Tricolor's borrowing base by at least $675 million; an analysis Kollar made at Chu's request in August 2025 put the collateral pledged in the reports at about $2.2 billion against about $1.4 billion in Tricolor's own loan system, an overstatement of about $800 million; and a later third-party analysis, described as preliminary, found that at least 6,850 of the 12,486 loans in TAST 2025-2, including 3,225 still pledged to TAST 2022-1, and more than 5,000 of the 18,377 loans in TAST 2025-1 were pledged to at least one other counterparty. The forensic firm and the third party are not named. The warehouse lenders, it says, had reserved more than $500 million of losses in aggregate and attributed them in public disclosures to "alleged fraudulent activity" at Tricolor, and about $945 million of principal remained outstanding on the securitisations at the bankruptcy, with the notes trading at steep discounts. These figures and allegations come from the SEC's civil complaint, on which no court has ruled and to which no answer from the defendants is retained. ^{1 2}

analysisAccording to the SEC, Chu's salary was $1 million in 2023, $1.5 million in 2024 and $2 million in 2025, and he received a $2 million bonus for 2024, two $125,000 securitisation success bonuses in 2025 and a $15 million "special" bonus in 2025; Kollar received two securitisation success bonuses totalling $275,000 in 2025. The SEC says the bonuses could not have been paid without the fraud and that Chu acquired substantial real estate in Texas, California, Georgia and Florida, including a residence in Miami bought for about $18 million. The indictment gives Chu's 2025 salary as $2 million but states no 2024 salary. The SEC further alleges that on July 1, 2025 Chu made a $6.5 million short-term loan to Tricolor and in August 2025, despite acknowledging to Kollar that the company was insolvent, had it repaid in full ($250,000 on August 11, $4,250,000 on August 19 and $2,000,000 on August 20, 2025), and that on or about August 29, 2025 he bought a property in Beverly Hills for $2.65 million. The indictment instead describes the August 19 and 20 payments, $6.25 million in total, as the final instalments of Chu's $15 million bonus and dates the Beverly Hills purchase to about August 27, 2025; the two filings characterise the same payments differently. These are allegations in the SEC's civil complaint; no court has ruled on them, and no answer from the defendants is retained. ¹