NEW YORK, Aug 19 (Reuters) - A U.S. appeals court on Wednesday revived an investor lawsuit over the 2023 collapse of Signature Bank, saying the Federal Deposit Insurance Corp (FDIC) seizure of the lender did not take away shareholders' right to sue.
In a 3-0 vote, the 2nd U.S. Circuit Court of Appeals in Manhattan rejected the FDIC's argument that a 1989 law adopted in the wake of that decade's savings-and-loan crisis gave the regulator sole power to pursue securities fraud claims after becoming the receiver of a failed bank.
The decision is a victory for shareholders led by the Swedish pension fund Sjunde AP-Fonden, which accused seven former Signature executives and directors and Signature's former auditor, KPMG, of misrepresenting the bank's liquidity risks and risk management, inflating its share price. Their proposed class action sought compensation for their losses.
The FDIC declined to comment. Lawyers for the shareholders did not immediately respond to requests for comment.
Regulators closed Signature on March 12, 2023, after worried customers withdrew several billion dollars, or about 20% of its deposits following the collapse of the larger Silicon Valley Bank two days earlier.
#signature #bank #york
In a 3-0 vote, the 2nd U.S. Circuit Court of Appeals in Manhattan rejected the FDIC's argument that a 1989 law adopted in the wake of that decade's savings-and-loan crisis gave the regulator sole power to pursue securities fraud claims after becoming the receiver of a failed bank.
The decision is a victory for shareholders led by the Swedish pension fund Sjunde AP-Fonden, which accused seven former Signature executives and directors and Signature's former auditor, KPMG, of misrepresenting the bank's liquidity risks and risk management, inflating its share price. Their proposed class action sought compensation for their losses.
The FDIC declined to comment. Lawyers for the shareholders did not immediately respond to requests for comment.
Regulators closed Signature on March 12, 2023, after worried customers withdrew several billion dollars, or about 20% of its deposits following the collapse of the larger Silicon Valley Bank two days earlier.
#signature #bank #york
2 months ago
