SAN FRANCISCO, CA / ACCESSWIRE / January 25, 2023 / Hagens Berman urges Silvergate Capital Corporation (NYSE:SI) investors who suffered significant losses to submit your losses now.
Expanded Class Period: Nov. 11, 2020 - Jan. 5, 2023
Lead Plaintiff Deadline: Feb. 6, 2023
Contact An Attorney Now: [email protected]
Silvergate Capital Corporation (NYSE:SI) Securities Class Action
The complaint alleges that Defendants made false and misleading statements to investors by repeatedly touting Silvergate's robust compliance framework (including its anti-money laundering and customer identification programs) as a foundation for its growth and by repeatedly assuring investors that it maintained sufficient liquidity to cover inflows and outflows on its platform.
The complaint further alleges that Silvergate's lax compliance practices enabled customers to engage in large scale criminal activities, including an egregious fraud perpetrated by FTX and Alameda Research and massive money laundering operations and, therefore, Silvergate did not comply with all applicable laws. Moreover, Silvergate did not maintain sufficient liquidity to protect against a bank run.
Investors began to learn the truth on Nov. 7, 2022, when Silvergate suddenly and without explanation announced demotion of its Chief Risk Officer. Over the ensuing months, news continued to emerge about Silvergate's exposure to FTX and Alameda and the company's lax compliance. By Dec. 5, 2022, Senator Elizabeth Warren sent a letter to Silvergate CEO (Alan Lane) demanding information about the company's relationship with FTX and Alameda from Silvergate CEO (Alan Lane). According to Senator Warren, "your bank appears to be at the center of the improper transmission of FTX customer funds."
Then, on Jan. 5, 2023, Silvergate disclosed that the collapse of FTX led to a run on its subsidiary Silvergate Bank involving massive withdrawals totaling $8.1 billion (or 68% of deposits held as of Sept. 30, 2022) that necessitated the company's sale of illiquid securities for a loss of over $700 million and short term borrowings of $4.3 billion from Federal Home Loan Banks.
These events drove the price of Silvergate shares crashing lower.
"We're focused on investors' losses and proving Defendants lied about the sufficiency of Silvergate's controls to guard against illegal activity and to protect deposits from misappropriation," said Reed Kathrein, the Hagens Berman partner leading the investigation.
If you invested in Silvergate and have significant losses, or have knowledge that may assist the firm's investigation, click here to discuss your legal rights with Hagens Berman.
Whistleblowers: Persons with non-public information regarding Silvergate should consider their options to help in the investigation or take advantage of the SEC Whistleblower program. Under the new program, whistleblowers who provide original information may receive rewards totaling up to 30 percent of any successful recovery made by the SEC. For more information, call Reed Kathrein at 844-916-0895 or email [email protected].
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About Hagens Berman
Hagens Berman is a global plaintiffs' rights complex litigation law firm focusing on corporate accountability through class-action law. The firm is home to a robust securities litigation practice and represents investors as well as whistleblowers, workers, consumers and others in cases achieving real results for those harmed by corporate negligence and fraud. More about the firm and its successes can be found at hbsslaw.com. Follow the firm for updates and news at @ClassActionLaw.
Reed Kathrein, 844-916-0895
SOURCE: Hagens Berman Sobol Shapiro LLP