Shareholders filed a lawsuit against VB Financial Group, SVB's CEO, and its CFO.
Shareholders claim the bunch concealed information from them. It is probably the first in many lawsuits.
The Rosen Law Firm jumped the gun to try to be the first and best in terms of class action suits. As you may know, a class action is very profitable for law firms.
The lawsuits claim they have breached their due diligence. They have misled shareholders with information. They have sent out false or non-complete information. Hence downplaying the financial risk and liquidity problems. All that is on the SEC info statements.
The lawsuit is also a convenient option to get more information quickly. Usually, both parties are expected to produce the relevant information.
The theory is that the rising interest rate from the FED caught the bank unprepared. Or unable to adjust quickly enough.
The owner, CEO, and CFO are guilty of non-disclosure. Not acting according to their positions. And not acting upon circumstances. Damages are yet to be determined.
As seen from the lawsuit, it is directed primarily to register as the first in the series of class actions. Because the first one usually wins the whole pot. So a 17-page lawsuit does not reveal much more than the media already told us.
The whole world is at its toes, however. There is a question of how much of an undervalued risk is out there. Governments hope it isn't a start of a new taxpayers bailout.
Although this time, it is the government's fault. They and their policymakers influence or make the directive that guides the national or federal guiding interests rate. And a domino effect like that would undermine the fiscal strategies.