More than $945m was still owed to bond investors when Tricolor failed, and the SEC says many of the loans behind those bonds had been pledged twice

More than $945m of principal on Tricolor Holdings' asset-backed bonds was still outstanding and payable to investors when the company entered bankruptcy in September 2025. The Securities and Exchange Commission said on Tuesday that many of the loans behind those bonds had been pledged more than once.

The Commission charged Daniel Chu, Jerome Kollar and Ameryn Seibold, respectively the former chief executive, chief financial officer and senior director of finance at the Texas lender. The complaint was filed in the United States District Court for the Southern District of New York.

What the Commission alleges

From at least 2020 until the bankruptcy, according to the Commission, Tricolor raised more than $1.9bn through asset-backed securities offerings while telling investors the company was financially sound, at a time when it was facing significant liquidity constraints and struggling to fund its operations. Offering materials and investor meetings represented that the loans in the collateral pools were free and clear of any other liens, the Commission says, and the defendants knew that many of those loans had been or would soon be double pledged.

The Commission further alleges that loan metrics were manipulated so that non-paying or defaulted loans appeared current, which made them eligible for the securitisation pools.

"We allege that these defendants defrauded investors based on bogus collateral and violated the integrity of our private credit markets," said David Woodcock, director of the SEC's Division of Enforcement, who credited the US Attorney's Office in Manhattan, the FBI and the FDIC Office of Inspector General.

What is being asked for

All three are charged with violating the antifraud provisions of the Securities Act of 1933 and the Securities Exchange Act of 1934. Chu is charged additionally with control person liability, and all three with aiding and abetting liability. The Commission is seeking injunctive relief, disgorgement with prejudgment interest and civil penalties against each defendant, and officer and director bars against Chu and Kollar.

None of it is proved. These are allegations in a civil complaint, and the Commission says the US Attorney's Office for the Southern District of New York announced criminal charges against the same three people in December 2025.