The first law suits have started arriving for Silicon Valley Bank and its top executives as the collapse of the high-tech lender continues to roil global markets.
A shareholder class action suit filed in San Jose accuses chief executive Greg Becker and chief financial officer Daniel Beck of concealing how rising interest rates would leave its Silicon Valley Bank unit “particularly susceptible” to a bank run.
Both executives sold millions of dollars worth of shares in the weeks prior to SVB's insolvency.
US regulator FDIC has called in former Fannie Mae troubleshooter Tim Mayopoulos to take over the running of the bank, which has been recast as Silicon Valley Bank N.A., and remains open for business.
The collapse of SVB is causing turmoil in finanial markets as shares in banks continue to slide across the globe.
Despite president Joe Biden's attempts to calm the markets yesterday, rating agency Moody’s has placed six US lenders - First Republic, Western Alliance Bancorp, Intrust Financial Corp., UMB Financial Corp., Zions Bancorp. and Comerica - at risk of a downgrade.
The warning comes as large US banks are being inundated with requests from customers trying to transfer funds from smaller lenders, the Financial Times is reporting.
JPMorgan Chase, Citigroup and Bank of America are among the big beasts trying to accommodate customers wanting to move deposits quickly from Silicon Valley Bank and other regional lenders.
They are taking extra steps to speed up the normal sign-up or “onboarding” process, according to several people familiar with the matter, says the FT.
In Europe and the UK, market indicators suggest that the fall out from SVB may be stabilising, although shares coninue to trend downwards.
Update: US markets rallied at the bell, with shares in First Republic up 55% in morning trading. PacWest, KeyCorp and Charles Schwab also moved higher, suggesting a rebound in investor confidence following Monday's sell-off.
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