SEC Charges Principals of Subprime Automobile Finance Company with Fraud

The Securities and Exchange Commission today announced fraud charges against two former executives of a subprime automobile finance company for misleading investors about the subprime automobile loans that backed its $100 million offering. The SEC's complaint, filed in U.S. District Court for the Northern District of Illinois, alleges that James Collins and Robert DiMeo, the former principals of Honor Finance LLC, were responsible for false and misleading statements about, and engaged in deceptive conduct regarding, Honor's servicing practices in connection with the Honor Automobile Trust Securitization 2016-1 (HATS). The complaint alleges that Honor packaged together several thousand automobile loans Honor funded to serve as collateral for the HATS offering, which raised $100 million through the sale of interest-bearing notes to investors.