- They have been sued for providing false claims that led to the SVB catastrophe.
- Executives from SVB, including CEO Greg Becker, were also named as defendants.
Industry heavyweights are in legal hot water as a result of the worldwide financial crisis sparked by the failure of the Crypto-friendly Silicon Valley Bank (SVB). Underwriters including Goldman Sachs Group Inc, Morgan Stanley & Co., and Bank of America Corp, as well as SVB’s auditor, KPMG LLP, have allegedly been sued for providing false or misleading claims that led to the SVB catastrophe.
A case filed in Federal court in San Francisco alleges that the bank’s auditors and underwriters were the guilty parties. Executives from SVB, including CEO Greg Becker, were also named as defendants.
Hid Extent of Banks Exposure
It said that the defendants had lied about SVB’s financial stability, liquidity, and established market position. While management, the auditor, and the underwriters allegedly hid the full extent of the bank’s exposure to risk.
Bloomberg states that none of the defendants have commented on the topic up until this point: KPMG, Goldman Sachs, Bank of America, or Morgan Stanley.
Yet, the complaint contends that the bank’s stock offering failed because underwriters made false statements in its registration materials. It said that such were false remarks. SVB Financial Company reportedly filed for Chapter 11 bankruptcy after losing money on bond trades owing to rising interest rates.
SVB Securities and SVB Capital’s funds and general partner companies were specifically mentioned as being excluded from these disclosures. Moreover, the complaint claims that KPMG is liable since the firm undoubtedly certified the annual report for Silicon Valley Bank in 2022, a week before the market closed on March 8.