Shareholders file class action lawsuit against Silicon Valley Bank parent company
Shareholders for the collapsed Silicon Valley Bank have filed a class action lawsuit against the bank’s parent company and its leaders over allegations that they did not disclose how interest rate increases could have an effect on business.
The shareholders, led by Chandra Vanipenta, filed the lawsuit on Monday against SVB Financial Group, former CEO Greg Becker and Chief Financial Officer Daniel Beck to seek unspecified damages for investors who backed the bank between June 16, 2021 and March 10, 2023.
The complaint states that quarterly and annual financial reports from the bank did not take into account warnings that the Federal Reserve gave about raising interest rates.
It also alleges that the 2020 annual report understated that the Fed’s interest rate hikes could cause “irrevocable” damage to the bank.
The complaint comes after a bank run led federal authorities to take over Silicon Valley Bank on Sunday. A lack of liquidity caused the bank to not have enough cash on hand to give to its customers seeking withdrawals, leading to the collapse.
