NEW: Silicon Valley Bank Sued by Shareholders For Securities Fraud

Silicon Valley Bank was hit with its first securities lawsuit on Monday.

Silicon Valley Bank was shut down by regulators on Friday in the biggest bank failure since the 2008 liquidity crisis.

SVB reportedly held $173 billion in deposits.

The Fed interest rate is at 4.57% and $117 billion of Silicon Valley Bank’s mortgage-backed securities were yielding only 1.56-1.66% – this caused a run on the bank.

By Friday Silicon Valley Bank was in FDIC receivership.

The Treasury and FDIC announced that all depositors of Silicon Valley Bank will have access to their money.

The shareholders however have just now filed a securities fraud lawsuit.

Shareholders filed a class action lawsuit against SVB on Monday arguing they were never warned about the risks to its business model, Bloomberg reported.

Bloomberg reported:

Silicon Valley Bank was hit with its first of what will likely be many securities-fraud lawsuits by shareholders, accused of failing to warn of risks to its business model.

The securities class action was filed on behalf of Chandra Vanipenta, who bought SVB shares at what he argues were artificially inflated prices due to false statements made by SVB Chief Executive Officer Greg Beckerand Chief Financial Officer Daniel Beck.

SVB Financial Group, the bank’s parent, filed multiple quarterly reports over the last two years that failed to disclose the risk that interest rate hikes posed to the bank, according to the complaint filed Monday in federal court in San Jose, California.

The public statements “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,” according to the complaint.

Photo of author
Cristina began writing for The Gateway Pundit in 2016 and she is now the Associate Editor.

You can email Cristina Laila here, and read more of Cristina Laila's articles here.


Thanks for sharing!