On June 13, 2025, U.S. District Judge Noël Wise denied all motions to dismiss in the securities fraud class action stemming from the March 2023 collapse of Silicon Valley Bank (“SVB”).
In January 2024, Lead Plaintiff Sjunde AP-Fonden, a Swedish pension fund, along with its co-lead plaintiff, Norges Bank, filed a 298-page complaint, bringing claims under the Securities Exchange Act of 1934 against SVB’s former CEO and CFO and Securities Act of 1933 against certain officers, directors, underwriters and an auditor involved in SVB’s eleven securities offerings in 2021 and 2022. The Complaint alleged that Defendants made materially false representations about SVB’s risk management controls, financial health, and internal controls, while concealing that SVB had a grossly deficient risk management program that posed a “significant risk” to “the [bank’s] prospects for remaining safe and sound.” The Complaint further alleged that, due SVB’s woefully inadequate controls, Defendants misclassified billions of dollars of long-dated securities on SVB’s balance sheet as “Held-to-Maturity” and falsely assured investors that SVB maintained effective controls over financial reporting.
The Court’s order sustained the Complaint in its entirety. The Court held each of Defendants’ statements about SVB’s risk management processes, internal controls, and classification of securities—which underpinned both the Exchange Act and Securities Act claims—were actionably misleading. In so holding, the Court rejected Defendants’ arguments that their statements were protected as forward-looking, mere opinions, or non-actionable puffery. The Court also held that KPMG’s statements that certified the financial statements as compliant with Generally Accepted Accounting Principles (“GAAP”) were actionable misrepresentations—holding that “KPMG’s audits were not conducted in accordance with GAAP or PCAOB despite certifying otherwise.” Also, the Court held that the Complaint sufficiently alleged scienter, or fraudulent intent, for the Exchange Act claims, finding that Defendants “had contemporaneous knowledge of information that contradicted the representations defendants made to their investors.”
The case will now proceed into discovery.