Silicon Valley Bank hit with class action lawsuit from shareholders
SVB's CEO and CFO are also named as defendants
SVB client: We didn't put our money here 'to take chances'
FOX Business' Kelly O'Grady reports that smaller tech-led startups will 'very much' be impacted by Silicon Valley Bank's insolvency.
Investors in Silicon Valley Bank 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.
Silicon Valley Bank headquarters in Santa Clara, California, US, on Friday, March 10, 2023. Silicon Valley Bank became the biggest US bank failure in more than a decade, after its long-established customer base of tech startups grew worried and yanke (Philip Pacheco/Bloomberg via Getty Images / Getty Images)
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.
Silicon Valley Bank CEO Greg Becker (Company / Fox News)
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."
FDIC member Dedra Dorn (Center Left) speaks with individuals in line outside Silicon Valley Bank's headquarters in Santa Clara, Calif., on Monday, March 13, 2023. The federal government intervened Sunday to secure funds for depositors to withdraw fro (AP Photo/ Benjamin Fanjoy / AP Images)
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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.