Fintech Nexus Newsletter (April 26, 2024): SVB Financial Group’s $2 billion lawsuit against the FDIC
We haven’t written about Silicon Valley Bank in almost a year, but the saga of the third-largest bank collapse continues.
SVB’s parent company, SVB Financial Group, had $2 billion on deposit at its bank subsidiary. When the FDIC made it clear that all depositors would be made whole, one would assume that included the $2 billion of the parent company’s money.
But the FDIC has so far refused to pay. Now, the lawsuits are flying.
For a while, it looked like the parent company would get their money as $2.12 billion was moved to the bridge bank, and the parent withdrew $177 million. But then the FDIC halted those payouts.
Lawyers ?for SVB Financial Group argue that ?”the FDIC’s act was tantamount ?to theft” given the public assurances on the safety of deposits.
The FDIC is not commenting on the pending litigation. It will be left ?to a California court to decide.
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