The Securities and Exchange Commission has filed a civil lawsuit against Daniel Chu, founder of Tricolor Holdings, along with two former executives, accusing them of defrauding investors through fabricated auto-loan receivables. The alleged scheme involved more than $800 million in double-pledged receivables used in asset-backed securitizations from 2018 to 2025. Tricolor filed for bankruptcy in September 2025 after lenders uncovered irregularities in loan data and collateral practices. Jerome Kollar, former CFO, has pleaded guilty and agreed to cooperate, while Daniel Chu has pleaded not guilty and is scheduled for trial in January 2027. The collapse affected major institutions including JPMorgan and Barclays, raising concerns about subprime auto lending practices.
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