JPMorgan Chase was aware for more than a year of “serious material weaknesses in accounting practices” at Tricolor Holdings, the Texas-based subprime auto lender and retailer that collapsed in September, according to a civil lawsuit from its bankruptcy trustee.
According to the complaint filed by Anne Elizabeth Burns, the court-appointed trustee managing the Tricolor estate, a JPMorgan audit in February 2024 “revealed approximately $13 million in double pledged loans on collateral pledged to JPMorgan”.
“Doubled pledging” refers to the practice of securing multiple loans against a single piece of collateral, which lenders are left sharing without their knowledge.
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