Silicon Valley Bank was hit with its first, of likely many, securities lawsuit on Monday.
Silicon Valley Bank Financial Group and two top executives were sued on Monday by shareholders, accusing them of concealing how rising interest rates would leave SVB “particularly susceptible” to a bank run.
The class action suit against SVB, CEO Greg Becker, and CFO Daniel Beck was filed in federal court in San Jose, California.
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.