Shareholders have filed a lawsuit against the company that owns Silicon Valley Bank, SVB Financial Group, and two of its senior executives. They are saying that the bank was not honest about how much trouble they would be in after interest rates went up. Also, some people whispered that the U.S. Department of Justice and the Securities Exchange Commission are looking into why Silicon Valley Bank is not working anymore.
Investigating the Causes of Silicon Valley Bank’s Collapse
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SVB Financial Group, the company that owns Silicon Valley Bank, and its bosses Greg Becker and Daniel Beck have been accused in a lawsuit. According to Reuters, this class action case claims that SVB and these executives did not tell shareholders about how rising interest rates could hurt their business. The class action was brought to court in California by Chandra Vanipenta and is for SVB shareholders.
Last Friday, the Federal Deposit Insurance Corporation (FDIC) took control of Silicon Valley Bank. On Sunday, they announced that all customers would get their money back. Then, on Monday, the FDIC turned the bank into a ‘bridge bank’ and allowed people to use it again. Somebody named Vanipenta is now suing SVB because he believes the company did not tell its shareholders that they could lose money when interest rates went up.
It’s been reported that two federal agencies, the Department of Justice (DOJ) and Securities and Exchange Commission (SEC), are investigating South Valley Bank’s (SVB) collapse. This means that both agencies have started a separate investigation into why SVB failed. They are also looking at stock sales made by top-level executives of SVB before it went bankrupt. The DOJ is being assisted by prosecutors in Washington and San Francisco on this case.
What is the final result we can expect to come out of the research on why Silicon Valley Bank failed? Comment your opinion below.
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