Bank failure fallout continued with the recent filings of a class action lawsuit alleging securities violations by Signature Bank – among the initial steps one seasoned attorney predicts will ultimately lead to bolstered regulatory oversight over the industry.
In a press release, Robbins Geller Rudman & Dowd LLP notified of the litigation naming the bank and certain of its top executives with violations of the Securities Exchange Act of 1934. “Shareholders and certain unsecured debtholders will not be protected,” officials wrote. “Senior management has also been removed. Any losses to the Deposit Insurance Fund to support depositors will be recovered by a special assessment on banks, as required by law.”
A similar class action suit was also filed against the parent company of Silicon Valley Bank (SVB), its CEO and chief financial officer, as the Associated Press and other media outlets reported. The suit seeks unspecified damages to those who invested in SVB between June 16, 2021, and March 10, 2023. Plaintiffs claim the banking company failed to disclose the risks that future interest rate increases would have on its business, the AP reported.