FDIC Prevails in $1.71 Billion Court Case Involving SVB Collapse | PYMNTS.com

A federal judge ruled that the former parent company of Silicon Valley Bank cannot pursue a $1.71 billion claim against the FDIC, according to Reuters. U.S. District Judge Beth Labson Freeman in San Jose, after a 12-day bench trial, said the trust succeeding SVB Financial Trust must take responsibility for negligent risk-taking by former executives and board encouragement. Freeman found the trust responsible for decisions to chase profits by heavily investing in long-term government and mortgage-backed securities. SVB collapsed after higher interest rates triggered at least $4.52 billion in losses, leading to a bank run and disrupting many technology startups with uninsured deposits. The trust argued for protection under the business judgment rule and blamed the FDIC for selling securities at a loss, but Freeman rejected both. The FDIC is also suing former executives, including ex-CEO Gregory Becker, to recover billions for alleged gross negligence.