SEC Obtains Final Judgment Against Principals of Subprime Automobile Finance Company Charged With Fraud

WASHINGTON, Dec. 6 -- The Securities and Exchange Commission issued the following litigation release (No. 1:21-cv-05040; N.D. Ill. filed Sept. 23, 2021):

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Securities and Exchange Commission v. James R. Collins and Robert F. DiMeo, Civil Action 1:21-cv-05040 (N.D. Ill. filed Sept. 23, 2021)

On December 3, 2025, the Securities and Exchange Commission obtained final judgment against James R. Collins and Robert F. DiMeo, two former executives of a subprime automobile finance company, whom the SEC previously charged with misleading investors about the subprime automobile loans that backed the company's $100 million securities offering.

The SEC's complaint alleged that Collins and DiMeo were responsible for false and misleading statements about, and engaged in deceptive conduct regarding, Honor Finance, LLC's servicing practices in connection with the Honor Automobile Trust Securitization 2016-1 (HATS). According to the SEC's complaint, Collins and DiMeo took various steps designed to artificially inflate the value of the collateral underlying HATS. Specifically, the complaint alleged that Collins and DiMeo were responsible for, among other things, including loans in the deal that were not eligible to be included in the securitization vehicle, extending loan repayment dates without borrower knowledge, and forgiving payments due from delinquent borrowers. The complaint further alleged that, because of these improper practices, the servicing and performance information Honor provided to investors at the time of the offering and in later monthly reports was false.

The final judgment, entered in the U.S. District Court for the Northern District of Illinois, incorporates injunctive relief Collins and DiMeo previously consented to, including permanently enjoining them from violations of the antifraud provisions of Section 17(a) of the Securities Act of 1933, and Section 10(b) the Securities Exchange Act of 1934 and Rule 10b-5 thereunder, as well permanently prohibiting them from acting as officers or directors of a public company. The final judgement further orders Collins to pay disgorgement in the amount of $450,000 plus prejudgment interest thereon in the amount of $100,332, for a total of $550,332. DiMeo is ordered to pay disgorgement in the amount of $162,500 plus prejudgment interest thereon on in the amount of $36,231, for a total of $198,731. The disgorgement and prejudgment interest amounts against both defendants are deemed satisfied by the restitution order entered against them in a criminal case filed against them under United States v. Collins et al., 20-cr-232 (N.D. Ill. May 23, 2020).

In the criminal case, the Court ordered Collins and DiMeo to jointly pay $67,243,790.94 in restitution, a portion of which was attributable to the conduct alleged in the SEC's case. Collins was also sentenced to a term of imprisonment of 48 months, while DiMeo was sentenced to one day of imprisonment and 12 months of supervised release.

This SEC's investigation was conducted by Jason Anthony and supervised by Paul Pashkoff. The litigation was handled by David Nasse.

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Resources

* Final Judgment (https://www.sec.gov/files/litigation/litreleases/2025/judg26431.pdf)

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Original text here: https://www.sec.gov/enforcement-litigation/litigation-releases/lr-26431