SVB collapse latest: Silicon Valley Bank ‘open for business’ says new CEO as Moody’s US bank view dims

A class action lawsuit is being filed against Silicon Valley Bank’s parent company, its CEO and its chief financial officer, saying the company has failed to disclose the risks that future rate hikes would pose to its business.

The lawsuit against SVB Financial Group, CEO Greg Becker and CFO Daniel Beck has been filed in the US District Court for the Northern District of California. She is asking for unspecified compensation for those who invested in SVB between June 16, 2021 and March 10, 2023.

The lawsuit from shareholders, led by Chandra Vanipenta, says some of SVB’s quarterly and annual financial reports failed to fully address the Federal Reserve’s warnings of rate hikes.

Former Vice President Mike Pence has joined the chorus of conservative voices trying to blame the collapse of the Silicon Valley bank on Democrats, while Democrats are trying to do the same to them.

In an editorial for The Daily MailMr. Pence takes aim at Joe Biden and the Democrats, claiming that “just like in 2008” the party “increased spending by over $10 trillion” which “stoked record inflation and inevitably forced the Fed to hike interest rates.” increase”.

He blamed some of the blame on the bank that collapsed on Friday, and linked his criticism to conservative media slogans.

Graig Graziosi reports what the former Vice President said.

For months, right-wing media workers and Republican elected officials have blamed an “awakened” agenda for the collapse of American institutions, from their schools and workplaces to the banks that make their businesses possible.

Silicon Valley Bank’s historic failure is likely the result of a variety of compound factors unrelated to so-called “alertness,” from cutbacks during the Donald Trump era to regulations introduced during the last financial crisis unsustainable bank focus on explosion of venture capital firms and tech startups becoming reality, rising interest rates and panic.

The collapse of Silicon Valley Bank shook the tech industry that had been the bank’s backbone, leaving shocked entrepreneurs grateful for the government’s reprieve that saved their money while mourning the loss of a venue that served as a friendly innovation club.

The Financial Regulator of New York has dismissed former Rep. Barney Frank’s comments, saying their decision to shut down Signature Bank had “nothing to do with crypto.” after regulators shut down Silicon Valley Bank.

Mr. Frank is a board member of Signature Bank and was one of the pioneers of the landmark Dodd-Frank Act enacted after the 2008 financial crisis to better protect the banking system from shocks.

“I think part of what happened was that regulators wanted to send a very strong anti-crypto message,” Mr. Frank told CNBC on Monday. “We became the poster child because there was basically no bankruptcy.”

But NYDFS denied its claims in a statement on Tuesday, saying its decision to close Signature Bank on Sunday and appoint Federal Deposit Insurance Corp as receiver “was based on the current status of the bank and its ability to conduct business in a safe and sensible manner on Monday.”

“The decisions made over the weekend had nothing to do with crypto. Signature was a traditional commercial bank with a wide range of activities and customers,” said an NYDFS spokesman.

“DFS has been facilitating well-regulated crypto activities for several years and is a national model for space regulation,” they said.

The spokesman added that Signature Bank failed to provide reliable and consistent data as withdrawal requests exploded over the weekend.

Mr Frank said he was surprised that the regulator said the decision to close the bank had nothing to do with cryptocurrency.

“I think that was a factor,” he said in an interview. “I’m confused as to why it was closed.”

He added that, to his knowledge, bank managers were working to provide data to regulators.

“What we have heard from our executives is that the deposit situation has stabilized and they would receive the capital from the discount window and I remain convinced that if we had opened on Monday given the announcements we would have done so of these two policies are in reasonably good condition and certainly operational,” he said.

Signature was a commercial bank with retail offices and nine national businesses, including commercial real estate and digital asset banking.

With reports from Reuters

A regulatory takeover of a New York-based bank should send a message to US banks to stay away from the cryptocurrency business, says a former member of Congress who served on the bank’s board.

Former US Rep. Barney Frank said Monday he believes state officials behind the move were trying to make an example of Signature Bank.

“This was just a way of saying to people, ‘We don’t want you involved with crypto,'” Frank told The Associated Press in a phone interview.

When President Joe Biden announced Monday that people who had deposited their money with the now-defunct Silicon Valley Bank would have their money at their disposal, he stressed that American taxpayers would not be let down.

Similarly, he added that those in charge of the bank must be fired and that Silicon Valley Bank’s investors would not recover, arguing that they took a risk and now must suffer the losses.

The Santa Clara, Calif.-based tech- and startup-focused lender was taken over by regulators on Friday during a run on its deposits, making it the second-largest bank failure in U.S. history.

It’s not uncommon for such investigations to be conducted when large financial institutions or public companies collapse or suffer unexpected losses, but the separate probes will also look at stock sales made by company bosses days before the bank’s collapse.

A congressman was widely praised for posting a two-and-a-half-minute video on Twitter and TikTok that clearly spelled out Silicon Valley Bank’s situation.

At 2 a.m. Monday morning, he shot a video for social media explaining how the Silicon Valley Bank crisis began, what was being done about it, and to avoid panic.

It wasn’t a Lehman Brothers moment, but there are three hard lessons to learn from the past few days, he writes David Callaway.