Silicon Valley Bank Sued by Shareholders Alleging Fraud
- Silicon Valley Bank has over $16 billion in unrealized losses as of the closing date.
- The complaint alleges mismanagement of circumstances that led to its downfall.
As per reports from Bloomberg, investors have filed a fraud lawsuit against the Silicon Valley Bank, which was shut down last week. Additionally, the financial institution’s abrupt and unexpected collapse is the greatest bank failure since the 2008 financial crisis.
The Federal Reserve made an announcement over the weekend that it would assist depositors who had not been covered by deposit insurance at the failed bank. Moreover, CNBC claims that Silicon Valley Bank has over $16 billion in unrealized losses as of the closing date.
To this day, the failure of Silicon Valley banks is one of the most worrisome events in the financial industry in recent memory. First, it was Silvergate Bank, then SVB, followed by Signature Bank.
More Cases Expected
The bank collapsed in what seemed like a matter of days. Because of this, fears of a bank run spread rapidly and caused mayhem for bank stocks the following Monday.
Bloomberg reports that shareholders are suing Silicon Valley Bank for fraud. The complaint alleges mismanagement of circumstances that led to its downfall. It is the first of what will certainly be numerous securities-fraud cases against SVB, according to Bloomberg.
Around midway through last week, word started getting out that the bank was desperately trying to shore up its coffers. After this, it actively pursued prospective sales as a means of survival. On the other hand, the effort was fruitless, and on Friday, California authorities announced that the bank had been shuttered and placed in receivership.
Similarly, news accounts have pointed to this pattern in American banks being a problem in the not-too-distant future. To what extent their losses have contributed to the forthcoming litigation is yet unclear.
Read more: https://thenewscrypto.com/silicon-valley-bank-sued-by-shareholders-alleging-fraud/
Text source: TheNewsCrypto – Blockchain & Cryptocurrency News M
