Shareholders file lawsuit against Silicon Valley Bank, alleging fraud: Report
A group of shareholders have reportedly filed a lawsuit against Silicon Valley Bank’s parent company and some of its executives amid the unfolding crisis.
Multiple news outlets reported on March 13 that many Silicon Valley Bank shareholders alleged fraud from the bank, CEO Greg Becker and chief financial officer Daniel Beck. The lawsuit would likely be one of the first filed in court since California regulators shut down the bank on March 10, leading to USD Coin (USDC) temporarily depegging from the dollar amid reports Circle had more than $3 billion of the stablecoin’s reserves at the financial institution.
The shareholders reportedly alleged that SVB, Becker and Beck concealed information on the firm’s interest rates, making it “particularly susceptible” to a bank run. Public statements from the bank, according to the shareholders, “understated the risks posed to the company by not disclosing that likely interest rate hikes, as outlined by the Fed, had the potential to cause irrevocable damage to the company”.
BREAKING: SVB Financial Group and two top executives were sued by shareholders who accused them of concealing how rising interest rates would leave its Silicon Valley Bank unit, which failed last week, susceptible to a bank run https://t.co/aaNrn1Cw2y https://t.co/aaNrn1Cw2y
— Reuters Business (@ReutersBiz) March 13, 2023
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Developments regarding the ongoing crises with Signature Bank, Silicon Valley Bank, and Silvergate Bank continue to be announced from regulators, investors, and industry leaders across the globe. Many crypto firms including BlockFi — in the middle of bankruptcy proceedings — and Gemini have either claimed to have had sufficient funds to offset exposure to the affected banks or otherwise not have any exposure at all.