Bloomberg has reported that KPMG, Goldman Sachs, Bank of America, and Morgan Stanley are being sued over the collapse of Silicon Valley Bank in the federal court in San Francisco.
In a recent investor lawsuit based on alleged misstatements leading to the collapse of Silicon Valley Bank (SVB), KPMG was sued as the bank’s auditor, along with underwriters including Goldman Sachs Group, Bank of America, Morgan Stanley, and Keefe, Bruyette & Woods. The complaint, filed in the federal court in San Francisco, is the first to target the bank’s auditors and underwriters, Bloomberg reported. The SVB collapsed last month due to bets on bonds that lost value as interest rates rose. The bank’s venture capital clients started withdrawing their deposits on a large scale, leading to the bank selling off assets at losses and triggering a frantic rush to withdraw funds from the bank. As a result, SVB’s parent company filed for Chapter 11 bankruptcy.
According to the lawsuit, collectively, the defendants “misrepresented the strength of the company’s balance sheet, liquidity, and position in the market.” The executives, auditor, and underwriters “understated and concealed the magnitude of the risks” facing the bank, which undermined the value of its own securities portfolio.
KPMG, Goldman Sachs, Bank of America, Morgan Stanley, and Keefe, Bruyette & Woods did not return emails seeking comment on the lawsuit. The underwriters issued misleading registration statements on the bank’s stock offerings that contained “untrue statements of material facts,” according to the lawsuit filed on Friday.
Fox News has confirmed that the Oversight Committee has subpoenaed Bank of America, Cathay Bank, JPMorgan Chase, and HSBC USA N.A., as well as former Hunter Biden business associate Mervyn Yan for Biden financial records.
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