Reuters: Shareholders of bankrupt Silicon Valley Bank sued for fraud
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Shareholder group bankrupt US bank Silicon Valley Bank (SVB) has filed a fraud lawsuit against the parent company of the credit institution SVB Financial Group. The lawsuit also concerns two high-ranking representatives of the bank’s management, writes Reuters.
According to the shareholders, the agency writes, management representatives concealed how the increase in interest rates of the US Federal Reserve System really affected the state of the bank’s balance sheet. In addition, shareholders accuse the bank of hiding its “special exposure” to the risk of bankruptcy.
On March 11, Silicon Valley Bank was declared bankrupt by the California regulator. SVB is the 16th largest bank in the US. The SVB bankruptcy was the largest since the 2008 crisis. He became the second largest bankrupt in US history after Washington Mutual Bank.
On March 8, the bank carried out an additional share issue for $1.75 billion “to strengthen its balance sheet.” In its investor prospectus, the bank explained that it needed to recover $1.8 billion in losses it incurred as a result of the sale of part of its asset portfolio. After that, the shares of the company collapsed by 60%.
Later also closed due to systemic risks Signature Bank . US President Joe Biden promisedthat the management of bankrupt banks will be fired and held accountable, and supervisory and regulatory measures in relation to the banking sector will be tightened.
More about bankruptcy – in the material “Kommersant” “SVB pulled the markets”.
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