SIVB, SIVBP CLASS ACTION NOTICE: Glancy Prongay & Murray LLP Files Securities Fraud Lawsuit Against SVB Financial Group
LOS ANGELES–(BUSINESS WIRE)–Glancy Prongay & Murray LLP (“GPM”), announces that it has filed a class action lawsuit in the United States District Court for the Northern District of California, captioned Snook v. SVB Financial Group, et al., Case No. 23-cv-01173, on behalf of persons and entities that purchased or otherwise acquired SVB Financial Group (“SVB” or the “Company”) (NASDAQ: SIVB, SIVBP) securities between June 16, 2021 and March 10, 2023, inclusive (the “Class Period”). Plaintiff pursues claims under Sections 10(b) and 20(a) of the Securities Exchange Act of 1934 (the “Exchange Act”).
Investors are hereby notified that they have until May 12, 2023 to move the Court to serve as lead plaintiff in this action.
If you suffered a loss on your SVB investments or would like to inquire about potentially pursuing claims to recover your loss under the federal securities laws, you can submit your contact information at www.glancylaw.com/cases/SVB-Financial-Group/. You can also contact Charles H. Linehan, of GPM at 310-201-9150, Toll-Free at 888-773-9224, or via email at firstname.lastname@example.org or visit our website at www.glancylaw.com to learn more about your rights.
On March 8, 2023, SVB announced that it intends to raise more than $2 billion through offerings of common stock and depositary shares and that it had sold approximately $21 billion of its available-for-sale securities, which will result in an after-tax loss of roughly $1.8 billion in the first quarter of 2023. The Company had taken these actions to “strengthen [its] financial position” after “client cash burn . . . remained elevated and increased further in February, resulting in lower deposits than forecasted.”
On this news, the Company’s common share price fell $161.79, or 60.4%, to close at $106.04 per share on March 9, 2023, thereby injuring investors.
On March 9, 2023, media outlets reported that various venture capital funds had advised their portfolio companies to pull their money out of SVB accounts. In a single day, investors and depositors attempted to pull $42 billion from the Bank. The run pushed the Bank into insolvency and the Bank was placed into Federal Deposit Insurance Corporation (“FDIC”) receivership on March 10, 2023.
It quickly emerged that SVB’s collapse was due in part to rapidly rising interest rates. Since 2021, SVB invested substantially in U.S. Treasuries and other government-sponsored debt securities. The Federal Reserve’s interest rate increases “battered the tech startups and venture capital firms Silicon Valley Bank serves, sparking a faster-than-expected decline in deposits that continues to gain steam,” according to media outlets.
Trading of the Company’s stock had been halted before the market opened on March 10, 2023, at which point it had already fallen 34% from the prior day’s closing price during pre-market trading.
On March 14, 2023, The Wall Street Journal published an article reporting that the Justice Department and the Securities and Exchange Commission were investigating, among other things, “stock sales that [the Company’s] officers made days before the bank failed.”
The complaint filed in this class action alleges that throughout the Class Period, Defendants made materially false and/or misleading statements, as well as failed to disclose material adverse facts about the Company’s business, operations, and prospects. Specifically, Defendants failed to disclose to investors that: (1) that rising interest rates were negatively impacting the Company’s investments in bonds; (2) that, because the Company’s clients were highly concentrated in the areas of tech startups and venture capital-backed companies, SVB was facing unique liquidity risks in an environment with high interest rates; (3) that, as a result of the foregoing, SVB was reasonably likely to require additional capital; and (4) that, as a result of the foregoing, Defendant’s positive statements about the Company’s business, operations, and prospects were materially misleading and/or lacked a reasonable basis.
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If you purchased or otherwise acquired SVB securities during the Class Period, you may move the Court no later than May 12, 2023 to ask the Court to appoint you as lead plaintiff. To be a member of the Class you need not take any action at this time; you may retain counsel of your choice or take no action and remain an absent member of the Class. If you wish to learn more about this action, or if you have any questions concerning this announcement or your rights or interests with respect to these matters, please contact Charles Linehan, Esquire, of GPM, 1925 Century Park East, Suite 2100, Los Angeles California 90067 at 310-201-9150, Toll-Free at 888-773-9224, by email to email@example.com, or visit our website at www.glancylaw.com. If you inquire by email please include your mailing address, telephone number and number of shares purchased.
This press release may be considered Attorney Advertising in some jurisdictions under the applicable law and ethical rules.
Glancy Prongay & Murray LLP, Los Angeles
Charles H. Linehan, 310-201-9150 or 888-773-9224
1925 Century Park East, Suite 2100
Los Angeles, CA 90067
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