Class action suit filed against Silicon Valley Bank’s parent company, executives
Written by ABC AUDIO on March 17, 2023
(NEW YORK) — SVB Financial Group and top executives have been named in a federal lawsuit amid the collapse of Silicon Valley Bank, the largest bank failure since the 2008 financial crisis.
A shareholder from Wisconsin, who says he lost about $12,000, is named as a plaintiff in a federal lawsuit seeking class action status against SVB who announced a $1.8 billion loss on the sale of securities on March 8.
The lawsuit against SVB Financial Group, CEO Greg Becker and CFO Daniel Beck was filed in the U.S. district court for the Northern district of California on Monday. It is looking for damages to be awarded to people like Chandra Vanipenta who said he invested in SVB between June 16, 2021, and March 10, 2023.
“$12,000 is a lot of money,” Chandra Vanipenta told ABC News.
Vanipenta, 51, is the father of two children and works in the software industry and said he had done his homework and read several financial reports about SVP, prior to investing. He said the company sounded solid and none of the financial reports mentioned warnings from the Federal Reserve about potential interest rate hikes.
“There was no indication of any risk,” Vanipenta said.
Vanipenta said the rapidly falling share price took him totally off guard, and that he lost every penny of $12,000 dollars in SVP shares he bought through his online brokerage account.
He said he bought the shares when the share price was over $200 a share.
“I never thought that it (the share price) would go to zero! And so suddenly,” he said.
The lawsuit states that annual reports for 2020 through 2022, “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.”
The lawsuit adds that Becker and Beck “intended to deceive Plaintiff and other members of the Class, or in the alternative, acted with reckless disregard for the truth when they failed to ascertain and disclose the true facts in the statements made by them … to members of the investing public…”
“I feel bad. I should have sold earlier,” Vanipenta said.
Vanipenta said when he learned his once valuable shares were worth nothing, he contacted a law firm to help him. Vanipenta’s lawyer, Laurence Paul Rosen, would not comment on the “pending litigation.”
A partner from a New York based law firm, Levi & Korsinsky, LLP, told ABC News that they plan to file a separate class action lawsuit imminently against SVB.
“We are extremely interested in this, and are looking into it. We will probably be filing our own case this week or next,” Adam M. Apton, a partner in the firm, told ABC News.
ABC News reached out to SVB for comment but have not yet received a response.
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