Grant & Eisenhofer Files Class Action Lawsuit Against SVB Financial Group on Behalf of Institutional Investor, Extending Class Period of Previously Filed Actions

SAN FRANCISCO--(BUSINESS WIRE)--An institutional investor, the International Union of Operating Engineers Local 132 Pension Fund, has filed a class action lawsuit today against SVB Financial Group (“SVB” or the “Company”), Gregory W. Becker (former CEO) and Daniel J. Beck (former CFO), alleging they defrauded investors by issuing false and misleading statements concerning the Company’s banking deposits and its investments in long-term securities.

The suit, brought in federal court in the United States District Court for the Northern District of California, was filed by leading investor law firm Grant & Eisenhofer.

The action is brought on behalf of all persons or entities who purchased or acquired SVB common stock between November 5, 2020 and March 10, 2023 (the “Class Period”). The action is captioned International Union of Operating Engineers Local 132 Pension Fund v. SVB Financial Group, Gregory W. Becker and Daniel J. Beck, 3:23-cv-01962 (N.D. Cal.). It is related to three previously filed actions: (1) Chandra Vanipenta v. SVB Financial Group, Greg W. Becker and Daniel Beck, 5:23-cv-1097 (N.D. Cal.) (“Vanipenta Action”); (2) Elliot Snook v. SVB Financial Group, Greg W. Becker and Daniel J. Beck, 3:23-cv-1173 (N.D. Cal.); and (3) City of Hialeah Employees’ Retirement System, et al. v. Greg W. Becker, Daniel J. Beck, et al., 3:23-1697 (N.D. Cal.). This action extends the class periods of the previously filed actions.

The complaint alleges violations of Sections 10(b) and 20(a) of the Securities Exchange Act of 1934. Specifically, SVB operated a regional bank under the “Silicon Valley Bank” brand, focusing its services on technology and healthcare startups. During the Class Period, SVB enjoyed a rapid rise in deposits, and poured these funds into long-term, low-yield Treasuries and mortgage-backed securities. Although those securities were unlikely to default, they were susceptible to losing value if interest rates rose, which put SVB at considerable risk, considering its portfolio was so heavily concentrated in these investments. Rather than admit to these risks, however, Defendants affirmatively downplayed them. Even as interest rates rose, Defendants continued downplaying SVB’s potential exposure.

SVB thus shocked its investors and depositors when, on March 8, 2023, it announced that it had sold “substantially all of its available for sale securities portfolio” at a loss of $1.8 billion. It also announced a sale of $2.25 billion of common and preferred stock in order to plug the loss. Depositors began pulling funds while SVB’s stock price plummeted 60% over the next day. Trading of SVB stock was halted before markets opened on March 10, 2023. That morning, the Federal Deposit Insurance Corporation (the “FDIC”) took control of SVB’s banking operations in order to protect depositors. SVB stock remained halted over the following weeks. On March 26, 2023, the FDIC announced it had sold all of SVB’s deposits and loans to another bank. Trading of SVB stock eventually resumed on March 28, 2023. Prices have been less than 1% of their pre-collapse levels.

For investors who purchased or acquired SVB common stock during the Class Period, you are a member of this proposed Class and may be able to seek appointment as lead plaintiff, which is a court-appointed representative for the Class, by complying with the relevant provisions for the Private Securities Litigation Reform Act of 1995 (the “PSLRA”). See 15 U.S.C. Section 78u-4(a)(2)(A)(i)-(iv). If you wish to serve as lead plaintiff, you must move the Court by no later than May 12, 2023, which is lead plaintiff deadline that was established when notice was published for the Vaniepenta Action on March 13, 2023. You do not need seek to become a lead plaintiff in order to share in any possible recovery. You may also retain counsel of your choice to represent you in this action.

If you wish to discuss this action or have any questions concerning this notice or your rights, please contact Caitlin M. Moyna at Grant & Eisenhofer at 646-722-8513, or via email at [e-mail].