Investors in Silicon Valley Ban are wasting no time suing to try to recoup their losses after the institution went belly-up amid a bank run on Friday,
Shareholders filed a class action lawsuit against SVB, its CEO Greg Becker, and CFO Daniel Beck on Monday, accusing the defendants of violating federal securities laws.
Rosen Law Firm announced the filing brought on behalf of investors who purchased SVB shares between June 16, 2021 and March 10, 2023, alleging the bank failed to make appropriate disclosures and that the named executives made false or misleading statements.
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The plaintiffs claim SVB failed to disclose the risks of rising interest rates by the Federal Reserve as announced by Fed chair Jerome Powell, and that the bank should have warned investors that “it would be worse off than banks that did not cater to tech startups and venture capital-backed companies” in the high interest rate environment.
The lawsuit also says SVB should have warned investors that it “was particularly susceptible to a bank run.”
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The filing further accuses Becker and Beck of intending to either “deceive” investors or “acted with reckless disregard for the truth when they failed to ascertain and disclose the true facts in the statements made by them or other personnel of the company to members of the investing public.”
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The class action was filed the same day the Federal Deposit Insurance Corporation, U.S. Treasury Department, and the Fed issued a joint statement announcing that SVB’s deposit-holders would be made whole at no cost to taxpayers, but “shareholders and certain unsecured debt holders will not be protected” under the government’s plan.