KPMG and Underwriters Sued for Misleading Statements, Resulting in Silicon Valley Bank’s Closure

04/09/2023 04:07 • Tech Trends • 85 views

On April 9th, it was reported that KPMG, responsible for providing audit services to Silicon Valley Bank, as well as underwriters of stocks or bonds of Silicon Valley banks such as Goldman Sachs, Morgan Stanley, and Bank of America, have been sued for making misleading statements that led to the closure of Silicon Valley Bank. The lawsuit was submitted to the United States Federal Court in San Francisco on the 7th local time. In addition to auditors and underwriters, Greg Becker, former CEO of Silicon Valley Bank, and several directors and executives have also been sued. (Whipping the Cowherd)

KPMG and Goldman Sachs are sued for the closure of Silicon Valley banks

Introduction

On April 9th, it was reported that KPMG and underwriters of stocks or bonds for Silicon Valley Bank, including Goldman Sachs, Morgan Stanley, and Bank of America, have been sued for making misleading statements that resulted in the closure of the bank. The lawsuit was filed in the United States Federal Court in San Francisco on April 7th, local time. In addition to KPMG and underwriters, Greg Becker (former CEO of Silicon Valley Bank), as well as several directors and executives, have also been sued.

History of Silicon Valley Bank

Before delving into the lawsuit, it’s essential to understand Silicon Valley Bank’s background. The bank was founded in 1983 and had a primary focus on providing services to the technology industry. It later became one of the largest banks in the United States catering to start-ups, venture capitalists, and technology companies. At its peak, Silicon Valley Bank had over 2,000 employees, and its market capitalization was over $10 billion.

Allegations Against KPMG and Underwriters

According to the lawsuit filed on April 7th, KPMG and underwriters are facing allegations of both negligence and fraud. The plaintiffs state that KPMG and underwriters provided misleading statements about Silicon Valley Bank’s financial condition, leading to investors purchasing the bank’s bonds in 2018 and 2019. Later it was revealed that the bank’s financial situation was worse than stated, leading to the bank’s closure.

Greg Becker and Other Executives Sued

In addition to KPMG and underwriters, Silicon Valley Bank’s former CEO, Greg Becker, along with several other executives and directors, have been sued. The plaintiffs allege that the executives failed to disclose vital information about Silicon Valley Bank’s precarious financial position. The suit also states that the executives sold their shares before the bank’s closure, indicating their knowledge about the bank’s worsening condition.

Fallout After the Bank’s Closure

Silicon Valley Bank’s closure has had far-reaching consequences. The bank’s clients, including investors, start-ups, and venture capitalists, are left in financial limbo. The closure has also affected the employees of Silicon Valley Bank, with many losing their jobs.

Conclusion

KPMG and underwriters of Silicon Valley Bank are facing a significant lawsuit due to allegations of negligence and fraud. Furthermore, former executives and directors of Silicon Valley Bank have also been sued for failing to disclose vital information and selling their shares before the bank’s closure. The closure of Silicon Valley Bank has had a considerable impact on its clients and employees.

FAQs

Q1. Why did Silicon Valley Bank close?
A1. Silicon Valley Bank closed after it was revealed that the bank’s financial situation was worse than previous statements by KPMG and underwriters had suggested, leading to investors purchasing the bank’s bonds.
Q2. Who else was sued in addition to KPMG and underwriters?
A2. Silicon Valley Bank’s former CEO, Greg Becker, along with several other executives and directors, have also been sued.
Q3. What is Silicon Valley Bank’s background?
A3. Silicon Valley Bank was founded in 1983 and had a primary focus on providing services to the technology industry. It later became one of the largest banks in the United States catering to start-ups, venture capitalists, and technology companies.

This article and pictures are from the Internet and do not represent aiwaka's position. If you infringe, please contact us to delete:https://www.aiwaka.com/2023/04/09/kpmg-and-underwriters-sued-for-misleading-statements-resulting-in-silicon-valley-banks-closure/

It is strongly recommended that you study, review, analyze and verify the content independently, use the relevant data and content carefully, and bear all risks arising therefrom.