Signature Bank and three former top executives were sued Tuesday by shareholders who accused the New York bank of fraudulently declaring that it was financially sound just three days before it was seized by state regulators. is strong
The proposed class action against Signature and its former chief executive Joseph DiPaolo, chief financial officer Stephen Wyremski and chief operating officer Eric Howell was filed in federal court in Brooklyn.
It seeks unspecified damages for shareholders between March 2 and 12 when New York’s Department of Financial Services took The signing, two days after the Federal Deposit Insurance Corp. seized the Silicon Valley bank.
Signature did not immediately respond to requests for comment.
Founded in 1999, Signature specializes in real estate lending and provides a range of services to law firms, and has made a push into cryptocurrency deposits in recent years. Former President Donald Trump was a customer until 2021.
Signature ended 2022 with $110.4 billion in assets and $88.6 billion in deposits, and is the second-largest U.S. bank to fail since 2008. Silicon Valley Bank is the largest.
In Tuesday’s lawsuit, shareholders led by Matthew Schaefer said that Signature concealed how it was “susceptible to takeovers” by making false or misleading statements about the health of the Silicon Valley bank in order to stoke fears of its troubles. ” was
This statement It included that Signature could meet “all customer requirements”, and had enough capital and liquidity to differentiate itself from rivals during “challenging times”.
The market value of Signature was around $6.5 billion before it collapsed.
The suit was filed by the legal firm that sued Silicon Valley bank parent SVB Financial Group and its CEO and CFO on Monday.
On Sunday, US regulators decided to cover depositors at Signature and Silicon Valley Bank, regardless of how much they had in their accounts.
Shareholders will not get any protection. Regulators said the move would Protect the American economy By strengthening public confidence in banking.
The case is Shaffer v. Signature Bank et al, U.S. District Court, Eastern District of New York, No. 23-01921.
