The $1.9 billion collapse of subprime auto lender Tricolor last year was fueled by a multiyear fraud involving its executives, the Securities and Exchange Commission alleged in charges announced Tuesday.
Texas-based Tricolor, which went bankrupt in September 2025, specialized in loans and car sales to buyers without Social Security numbers or credit histories. From at least 2020 through its bankruptcy, the auto lender raised nearly $2 billion while its top executives misled investors about the health of the business, the SEC alleged.
The executives, including former CEO Daniel Chu, portrayed the company as sound while knowing it faced severe liquidity constraints and struggled to fund its operations, the SEC claimed.
“We allege that these defendants defrauded investors based on bogus collateral and…
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