The Law Offices of Frank R. Cruz Announces the Filing of a Securities Class Action on Behalf of SVB Financial Group (SIVB) Investors

LOS ANGELES--(BUSINESS WIRE)--The Law Offices of Frank R. Cruz announces that a class action lawsuit has been filed on behalf of persons and entities that purchased or otherwise acquired SVB Financial Group (“SVB” or the “Company”) (NASDAQ: SIVB) securities between June 16, 2021 and March 10, 2023, inclusive (the “Class Period”). SVB investors have until May 12, 2023 to file a lead plaintiff motion.

If you are a shareholder who suffered a loss, click here to participate.

On March 8, 2023, after trading hours, SVB announced that it intended to raise more than $2 billion, including $500 million from the private equity firm General Atlantic, and $1.75 billion through public offerings. The Company also disclosed that it sold approximately $21 billion of its securities portfolio, which will result in an after-tax loss of roughly $1.8 billion in the first quarter of 2023.

On this news, SVB’s stock price fell $161.79, or 60.4%, to close at $106.04 per share on March 9, 2023, thereby injuring investors.

On March 9, 2023, The Wall Street Journal published an article which stated that “rising interest rates have caused the value of existing bonds with lower payouts to fall in value,” while an article released by Markets Insider asserted that “[SVB’s] $21 billion bond portfolio had a yield of 1.7% and a duration of 3.6 years. Today, the 3-Year US Treasury note yields 4.7%, a far-cry from the levels at which the bank bought the Treasury notes prior to 2022.”

On March 10, 2023, trading in the Company’s shares were halted, essentially rendering the Company’s shares illiquid and valueless.

Also on March 10, 2023, the California Department of Financial Protection and Innovation took over SVB after the bank tried and failed to find a buyer. The California Department of Financial Protection and Innovation stated that: “(1). The Bank’s liquidity position is inadequate, and it cannot reasonably be expected to pay its obligations as they come due. (2). The Bank is insolvent. (3). The Bank is conducting its business in an unsafe manner due to its present financial condition.”

The complaint filed in this class action alleges that throughout the Class Period, Defendants made materially false and/or misleading statements, as well as failed to disclose material adverse facts about the Company’s business, operations, and prospects. Specifically, Defendants failed to disclose to investors that: (1) the Company failed to disclose to investors the risks presented by impending rising interest rates; (2) the Company failed to disclose to investors that, in an environment with high interest rates, it would be worse off than banks that did not cater to tech startups and venture capital-backed companies; (3) the Company failed to disclose that, if its investments were negatively affected by rising interest rates, it was particularly susceptible to a bank run; (4) as a result, Defendants’ positive statements about the Company’s business, operations, and prospects were materially misleading and/or lacked a reasonable basis at all relevant times.

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If you purchased SVB securities during the Class Period, you may move the Court no later than May 12, 2023 to ask the Court to appoint you as lead plaintiff. To be a member of the Class you need not take any action at this time; you may retain counsel of your choice or take no action and remain an absent member of the Class. If you purchased SVB securities, have information or would like to learn more about these claims, or have any questions concerning this announcement or your rights or interests with respect to these matters, please contact Frank R. Cruz, of The Law Offices of Frank R. Cruz, 1999 Avenue of the Stars, Suite 1100, Los Angeles, California 90067 at 310-914-5007, by email to [e-mail], or visit our website at www.frankcruzlaw.com. If you inquire by email please include your mailing address, telephone number, and number of shares purchased.

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