Investment Loss Recovery Attorneys

Our Investment Loss Recovery Lawyers Are Investigating

A Manhattan federal grand jury has indicted former Tricolor Holdings executives for fraud. This has further raised concerns for those affected by the now bankrupt subprime auto lender. The Texas-based company provides subprime car loans to low-income buyers that have poor or limited credit. It filed for Chapter 7 liquidation in September after falling into more than $1B in debt.

Shepherd Smith Edwards and Kantas (investorlawyers.com) is investigating investment losses involving Tricolor. Investors who got involved with Tricolor through feeder funds may be affected too.

What Are the Fraud Allegations Involving Tricolor?

Tricolor used temporary credit lines for financing auto loans, which were then bundled into asset-backed securities (ASB). Many of its borrowers are undocumented and/or low-income Hispanics in California, Nevada, and Texas. After Tricolor’s $1B bankruptcy filing, $119M in its top-ranked ABS that it sold in June fell to around $0.78 cents on the dollar, while tranches that were lower-ranked dropped to $0.12.

In Tricolor’s bankruptcy filing, about 25,000 parties are listed among those affected, including banks, asset managers, and others. Bloomberg reported that JPMorgan, Barclays, and Fifth Third Bancorp could be looking at impairment charges reaching $200M.

Tricolor may have pledged $2.2 billion in collateral while just holding $1.4B in collateral.

The indictment contends that Tricolor kept multiple credit lines secured through car loan receivables. By 2018, its executives allegedly started to pledge the same collateral to different lenders while purportedly modifying records so car loans with payments that were past due looked to be up-to-date instead.

More specifically, former Tricolor CEO Daniel Chu and ex-COO David Goodgame are accused of double-pledging collateral and allegedly engaging in manipulating the description and classification of “near-worthless” assets to make it seem as if they were legitimate collateral. A series of fraudulent schemes were purportedly involved that allowed Tricolor to secure hundreds of millions of dollars in cash advances. Prosecutors are accusing Chu of unjust enrichment. Two other Tricolor executives, former Tricolor Jerome Kollar and ex-finance executive Ameryn Sybold, pleaded guilty to criminal charges related to the alleged fraud.

US Attorney Jay Clayton declared that the alleged fraud was an “integral component” of Tricolor. He contends that the subprime auto lender’s major collapse hurt investors, customers, banks, and the 1000 employees who were placed on unpaid leave after the bankruptcy filing.

How Can Our Asset-Backed Securities Attorneys Help Over Your Tricolor Investor Losses?

Shepherd Smith Edwards and Kantas Investment Loss Recovery Attorney is investigating whether financial advisor misconduct or negligence was involved. We can determine whether you may have been the victim of unsuitable investment recommendations, misrepresentations and omissions, negligence, gross negligence, or a failure to supervise by the broker that marketed and sold you these Tricolor Holdings ABS.

We represent retail investors, retirees, institutional investors, and many others in pursuing their losses sustained in investments. Even if your financial advisor was unaware of the alleged Tricolor fraud, you may be able to sue them for damages.

Our Investment Loss Recovery Attorneys have helped thousands of investors to collectively secure losses they sustained from liable financial advisors. Call our Investment Loss Recovery Attorneys today at (800) 259-9010 or contact us online to fill out your free case assessment.