Cotchett, Pitre & McCarthy Files Lawsuit on Behalf of Silicon Valley Bank Shareholder to Recover for Stock Held in Reliance on Executive Misstatements
SAN MATEO, Calif.–(BUSINESS WIRE)–Cotchett, Pitre & McCarthy, LLP filed a lawsuit on behalf of Jane Lodato, against SVB Financial Group CEO Gregory Becker, CFO Daniel Beck, and Finance Committee Chair Joel Friedman for alleged breach of fiduciary duty, fraud and deceit, negligent misrepresentation, and constructive fraud.
The now-infamous collapse of Silicon Valley Bank was immeasurably disruptive. As set forth in the complaint, the leadership at SVB Financial Group (“SVB”), Silicon Valley Bank’s parent company, had been hiding the Bank’s severe liabilities and risks for years—despite several urgent citations dating back to 2019 from the Federal Reserve Bank of San Francisco, SVB leadership did not change these perils or dutifully warn investors. Instead, as alleged, these problems festered and grew while Defendants misled those around them and profited off timely stock sales until it came to a dramatic boiling point when liquidity issues led to a $1.8 billion loss and a run on the bank, completely tanking the stock. Plaintiff Jane Lodato brings an individual suit for the losses that she retained based on Defendants’ misrepresentations.
Joe Cotchett, a partner at the firm of Cotchett, Pitre & McCarthy said: “This case represents one of the worst bank failures in U.S. history—as alleged, Silicon Valley Bank’s executives ignored warnings and ran their bank into the ground while their statements encouraged investors like Ms. Lodato to hold on to a ticking bomb.”
Lodato, a former employee of the bank, repeatedly planned on and took steps to sell her shares of SVB stock. However, as alleged in the complaint, SVB Financial Group, through its misleading and fraudulent statements made by executives and in official investor documents, persuaded her to hold her shares. According to the complaint, the Defendants owed a duty to Lodato to act with honesty, loyalty, and fair dealing, which they failed to do by disseminating false statements that allowed them to line their own pockets while defrauding Lodato.
Ms. Lodato alleges that, had there been a truthful account of SVB’s true risks and status, Lodato would have sold all of the stock she held, over 1400 shares. Those shares, once worth $755 each, are now trading at around $0.17.
Tyson Redenbarger, another partner at Cotchett, Pitre & McCarthy said: “Michael Barr, of the US Federal Reserve, said it best when he called the Bank’s downfall ‘a textbook case of mismanagement.’”
Gia Jung, a lawyer at Cotchett, Pitre & McCarthy said: “As alleged in the complaint, SVB and its executives had a duty to accurately portray the risks and realities of the Bank—instead, they hid their mistakes in favor of profit, which came at the expense of our client and her now lost investment.”
See the complaint for details HERE
About Cotchett, Pitre & McCarthy, LLP
Cotchett, Pitre & McCarthy, LLP engages exclusively in litigation and trials and has earned a national reputation for its dedication to prosecuting or defending socially just actions. To learn more about the firm, visit www.cpmlegal.com.
Contacts
Joe Cotchett
Cell/Text (650) 245-8040
Office (650) 697-6000
jcotchett@cpmlegal.com
Cotchett, Pitre & McCarthy, LLP
Tyson Redenbarger
Cell/Text (720) 530-4123
Office (650) 697-6000
tredenbarger@cpmlegal.com
Cotchett, Pitre & McCarthy, LLP
Gia Jung
Cell/Text (858) 900-7879
Office (650) 697-6000
gjung@cpmlegal.com
Cotchett, Pitre & McCarthy, LLP
CPM MEDIA:
Lee Houskeeper
Cell/text: (415) 654-9141
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