In a lawsuit filed in San Jose Federal Court in California, Bank of Silicon Valley (SVB) and its Chief Executive, Gregory Becker, and Chief Financial Officer, Daniel Beck, were accused of concealing the bank’s vulnerability to rising interest rates.
The lawsuit in question was the first lawsuit filed regarding the bankruptcy of SVB, for which the US Federal Deposit Insurance Corporation (FDIC) appointed a trustee.
Share price dropped more than 60 percent after California-based SVB closed its $21 billion bond position with a loss of approximately $1.8 billion and announced that it would raise more than $2 billion in capital.
Its operations were suspended as the bank continued to lose after some venture capital investors advised companies to withdraw their money from the bank.
While the FDIC announced on March 10 that a trustee was appointed to SVB, which caused a decline in the markets, it was noted that SVB was the first FDIC insured institution to go bankrupt this year.
The bankruptcy of the SVB was one of the largest recorded bankruptcies in the US since the 2008 global financial crisis.
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