DOJ Charges Tricolor Founder, COO with Multi-Year Systemic Fraud

Tricolor Founder Being Charged Over Alleged Fraud, DOJ Says

US prosecutors charged the founder of bankrupt subprime auto lender Tricolor Holdings with conspiring to defraud lenders and investors, in a sweeping indictment of the leadership of a used car dealer and financing company that collapsed in a wave of scandal in September.

The indictment accuses Daniel Chu and other executives who had worked at Tricolor of operating the company through “systemic fraud.” Tricolor filed for bankruptcy in September after shutting down more than 60 locations across the US Southwest.

Prosecutors said, at Chu’s direction, executives repeatedly defrauded lenders through various schemes including “double-pledging” auto loan collateral and manipulating descriptions of the loans. They also said Tricolor classified assets pledged for collateral to make “near-worthless” assets appear to meet lenders’ requirements.

SEC Alleges $48.5M Crypto-Mining Fraud by Philadelphia Man

The U.S. Securities and Exchange Commission accused a Philadelphia man in Delaware federal court Wednesday of defrauding investors of $48.5 million through his cryptocurrency-mining business, in which he said he offered “a turnkey solution for average people to start making a passive income stream through Bitcoin mining without all the headaches of operating the machines.”

The SEC brought the case against Danh C. Vo. Jason Spitalnick, a partner at Snell & Wilmer who previously served as enforcement counsel for the SEC, is not involved in the case. But he said in an email that “Chairman Atkins has signaled a laser-like focus on those who lie, cheat or steal—and this complaint alleges a trifecta where the defendant managed to do all three.”

“The lies include defendant’s assertion of being fully compliant and SEC-registered, as well as displaying false data in client accounts,” he said. “The cheating includes selling non-existent mining rigs and including illusory terms in investment agreements. The steal was defendant diverting tens of millions of dollars to his personal accounts and those of his family.”

SEC Move May End Securities Class Action Litigation as We Know It

Securities class action settlements totaled $3.7 billion in 2024—bested only by $4 billion the year prior, a historic record. The payments came from a mix of insurance and public company shareholders at the time of settlement (because that is really who pays a company’s settlement). The recipients are primarily former shareholders of those public companies.

A recent move by the Securities and Exchange Commission makes it possible for public companies to end this form of dispute. The SEC voted to allow companies to go public with charters or bylaws that include a mandatory arbitration provision for shareholder claims under the federal securities laws.

This may prompt newly public companies to adopt bylaws that require individual arbitration for securities claims. Companies that are already public also may amend their bylaws to adopt such provisions. If companies do so, they may end shareholders’ ability to file federal securities claims as class actions—eliminating billions per year in liability.

Donald and Melania Trump’s Terrible, Tacky, Seemingly Legal Memecoin Adventure

The whole operation had happened more or less out in the open. But no one seemed to know how Trump and his wife had come to launch their coins. Someone must have explained to them what memecoins are and how profitable they can be. An elderly politician and a middle-aged ex-model hadn’t likely created digital tokens on the blockchain themselves. But who were their mystery partners? Those people would know just how the Trumps had extracted so much money from their fans.

The trail leads all the way back to the origins of memecoins, an unregulated, nihilistic gambling game that swept the crypto world. It points to a college-age founder whose company generated $1 billion from them; a 29-year-old who’s been called “the phantom” in Argentina, where he caused a national scandal; and a Singaporean crypto executive who goes by Meow and whose online avatar is a cartoon cat in an astronaut helmet.

Together, they set a new standard for converting hype into money—and helped set the table for a year of unprecedented presidential profiteering. The memecoin craze has faded. But it goes to show, as the Trump administration rolls back financial regulations, what can happen when the rules are made by the hype men themselves.

In Senate testimony, FCC chairman says his agency isn’t independent

Federal Communications Commission Chair Brendan Carr, testifying Wednesday before a Senate committee, said the regulatory body is not an independent government agency — a position that counters his previous public statements and the office’s own website. In an exchange with Sen. Ben Ray Luján, D-N.M., Carr said the FCC is “not formally an independent agency” because, he said, commissioners can be removed by the president.