Just over three months after SVB Financial Group was closed by regulators, at least four proposed class actions have been filed against the firm and its executives — and are now winding their way through the legal system.
Judge James Donato of the U.S. District Court Northern District of California has set a Sept. 21 hearing to consider a motion to consolidate the cases as well as to hear arguments for naming a lead plaintiff and counsel, according to a signed June 15 order. A hearing on the consolidation that had previously been set for this week was canceled.
Santa Clara, California-based SVB, its now ex-CEO Greg Becker and ex CFO Daniel Beck were hit by a flurry of legal complaints from investors which began piling up within days of its failure.
The first or one of the first proposed class actions was brought by a group of shareholders led by Chandra Vanipenta and is seeking unspecified damages for the bank’s investors between June 16, 2021, and March 10.
It alleges SVB, Becker and Beck concealed from investors the impact that high interest rates would have on the tech- and VC-focused firm’s business, Industry Dive sister publication Banking Dive previously reported.
In the filing, the plaintiffs also accused Becker and Beck of intending to either “deceive” investors or of acting “with reckless disregard for the truth when they failed to ascertain and disclose the true facts in the statements made by them or other personnel of the company to members of the investing public.”
Another proposed class action suit filed in April named the bank, Becker and Beck as well as SVB’s long-time auditor, KPMG, shining a light on the auditor’s report signed about two weeks before the bank failed which was “silent” on whether there was any doubt about its ability to continue operating as a going concern, CFO Dive previously reported. The suit was filed by Hialeah, Florida-based City of Hialeah Employees’ Retirement System, along with two other retirement and/or pension-related funds that acquired the bank’s shares during the class period.
Previously KPMG has defended its work, saying that the firm conducts its audits in accordance with professional standards and noting that audit opinions are based on evidence available up to and at the date of the opinion.
Last month Laurence M. Rosen, an attorney for the group led by Vanipenta, filed a motion asking the judge to consolidate his case with three “related actions” which did not include the case filed by City of Hialeah Employees’ Retirement System.
Attorneys for SVB, Beck, Becker did not respond to requests for comment and a spokesperson for Rosen declined to comment.
