SEC Charges Former Executives With Fraud in Connection With $1.9 Billion Collapse of Subprime Auto Lender Tricolor

The Securities and Exchange Commission today charged Daniel Chu, Jerome Kollar, and Ameryn Seibold, the former CEO, CFO, and Senior Director of Finance, respectively, at Texas-based Tricolor Holdings, LLC, for their roles in an alleged multi-year scheme to defraud investors by double pledging hundreds of millions of dollars of subprime auto loans to multiple asset-backed securities (ABS) offerings and lenders.

According to the SEC’s complaint, from at least 2020 through Tricolor’s bankruptcy in September 2025, Tricolor raised more than $1.9 billion through ABS offerings while Tricolor, Chu, and Kollar made numerous false and misleading representations to investors about the lender’s overall financial health, portraying the company as financially sound despite knowing that Tricolor was facing significant liquidity constraints and struggling to fund its operations. In offering materials and meetings, Tricolor allegedly represented that the loans included in the ABS collateral pools were free and clear of any other liens when the defendants knew that many had been or would soon be double pledged. The complaint further alleges that the defendants deceived underwriters and investors, including by manipulating various loan metrics to make non-paying or defaulted loans appear current and therefore eligible for inclusion in the securitization pools. According to the complaint, more than $945 million of principal associated with the ABS offerings remained outstanding and payable to investors at the time of Tricolor’s bankruptcy.

by SEC Press Release

Senior Director Of Operations Charged With Insider Trading

United States Attorney for the Southern District of New York, Jamie McDonald, and Special Agent in Charge of the Miami Field Office of the Federal Bureau of Investigation (“FBI”), Brett Skiles, announced today the unsealing of an Indictment charging DAVID PIDGEON with securities fraud stemming from insider trading based on misappropriated financial information belonging to his employer. PIDGEON was arrested today and will be presented in Boston, Massachusetts. The case has been assigned to U.S. District Judge Jennifer H. Reardon. [...]

As alleged in the Indictment unsealed today in federal court:

In or about October 2025, PIDGEON, then Senior Director of Operations at Treace Medical Concepts, Inc. (“TMCI”), obtained material nonpublic information about TMCI’s lower sales volume and difficulty meeting its financial projections. Days before TMCI’s third quarter earnings announcement, PIDGEON sold shares of other issuers and used the proceeds to purchase short-term put options in TMCI stock. PIDGEON’s trades occurred during a company-wide blackout period when TMCI employees were prohibited from trading in TMCI securities, and in violation of TMCI’s policies, which prohibited employees from trading in TMCI options at any time. On November 6, 2025, following market close, TMCI announced its third quarter financial results, which included a net loss of $16.3 million and downwardly adjusted 2025 revenue projections. The following day, TMCI’s stock price dropped approximately 28%. That same day, Pidgeon sold all of his TMCI options.

by DOJ Press Releases

U.S. SEC proposes first major crypto rule in surprise announcement

The U.S. Securities and Exchange Commission has made its first major foray into crypto regulation, issuing a proposed rule meant to clear a path for offering crypto offerings without triggering certain regulatory demands as securities.

The agency action on Tuesday is an opening step to establish "Regulation Crypto Assets" as a first permanent rule governing digital assets — a particularly meaningful development after Congress has so far fallen short in passing a crypto market structure law. The issuance — distinct from the SEC's separate crypto initiative known as the "innovation exemption" for tokenized securities, which hasn't yet emerged — had been unexpected after the agency had cancelled an August 14 meeting meant to propose the same rule.

by CoinDesk

Cybersecurity Vulnerabilities Lead to Securities Suit Against Israeli Company

or many years, cybersecurity-related issues have been recognized as a potential source of D&O claims and liability. More recently, other D&O claims concerns, including artificial intelligence (AI), geopolitical issues, and even market manipulation allegations, have become more conspicuous, and cybersecurity-related issues have been less prominent. However, a securities suit filed earlier this month against Israeli-based web data collection company Alarum Technologies highlights that cybersecurity-related issues remain an important potential source of D&O claims and also shows how cybersecurity-related concerns continue to evolve....

by The D & O Diary

Prediction Market Surveillance: A View from the Trenches

As prediction markets expand and trading volumes reach record levels, rigorous insider-trading surveillance is not optional; it is essential to the credibility, integrity, and long-term viability of the industry. Platforms that fail to build surveillance systems tailored to prediction markets risk importing equity-market concepts in ways that are incomplete, ineffective, or misleading. Effective surveillance must account for the distinctive structure of these markets by looking beyond trades placed shortly before large price moves, conducting ex post reviews of unusually profitable positions after contracts settle, applying flexible measures of materiality tied to trader-level gains and losses, and adjusting win-rate analysis to reflect the probabilities implied by contract prices. If prediction markets are to grow into trusted, durable, and well-functioning markets, incumbents and new entrants alike must treat the detection and deterrence of insider trading as a core market-design obligation.

by Harvard Law Corp Gov

Cantor Lets Hedge Funds Place Big Bets on Kalshi’s Prediction Markets

Cantor Fitzgerald plans to give investment funds access to Kalshi’s prediction markets.

Cantor’s some 3,000 institutional clients, which range from family offices to hedge funds, will have full access to Kalshi’s suite of events-based, yes-or-no contracts such as those tied to weather, commodities and corporate results.

“The investor base that we’ve met—we’ve met dozens—has been really keen on entering and participating in the prediction markets,” said Pascal Bandelier, co-chief executive and global head of equities at Cantor.

by WSJ