In the midst of the ongoing crisis, recent reports suggest that a number of shareholders have initiated legal action against the Silicon Valley Bank, its parent corporation and several of the bank’s management. The proposed class action lawsuit was filed in federal court in San Jose, California against SVB, CEO Greg Becker, and CFO Daniel Beck.
Silicon Valley Bank Sued By Investors
The lawsuit would most likely be one of the first to be filed in court after California regulators closed the bank on March 10. This led to the catastrophic de-pegging of one of crypto’s largest stablecoin by market cap, as USD Coin (USDC) gradually started deviating from its $1 value. This occurred in response to reports that Circle had more than $3 billion worth of reserves trapped at the financial institution. At the time of writing, Präis USDC was currently exchanging hands at $0.99 at a market cap of $39 billion.
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According to the lawsuit, the shareholders alleged that SVB, Becker and Beck withheld information about the company’s interest rates, which made the firm “particularly susceptible” to a bank run and even artificially inflated their share prices. The official comments “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 lawsuit.
The Widening U.S. Banking Crisis
Prior to its abrupt collapse, the bank was reported to have had assets worth $209 billion and deposits standing at $175.4 billion. Silicon Valley Bank became the largest bank to fail in the United States since the 2008 financial crisis. The complaint asks for unspecified compensation for SVB investors between June 16, 2021 and March 10, 2023.
Fears of contagion have aroused among other lenders that also cater to wealthy clients as a result of its failure. These clients include technology start-ups, companies supported by venture capital, crypto-focused companies like trading exchanges as well as significant regional banks. SVB announced on Monday that it is currently investigating potential strategic avenues for the remainder of the company, which has been divested of its primary banking operations.
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Dee presentéierten Inhalt kann d'perséinlech Meenung vum Autor enthalen an ass ënner Zoustand vum Maart. Maacht Är Maartfuerschung ier Dir a Kryptowärungen investéiert. Den Autor oder d'Publikatioun huet keng Verantwortung fir Äre perséinleche finanzielle Verloscht.
Source: https://coingape.com/trouble-grows-silicon-valley-bank-shareholders-file-lawsuit/