SVB Financial accuses FDIC of 'improper actions' to block the firm from accessing $2 billion of its cash
- Silicon Valley Bank's parent company said it can't access $2 billion it deposited at the collapsed bank.
- SVB Financial filed for bankruptcy on Friday.
Recent bankruptcy documents show a brewing fight between Silicon Valley Bank's parent company and US federal regulators.
SVB Financial Group, the former parent company of SVB, said it can't access $2 billion of its cash deposited at the collapsed bank that was seized by the Federal Deposit Insurance Corporation.
Lawyers for SVB Financial said in the group's first bankruptcy hearing in Manhattan on Tuesday that the FDIC took "improper actions" to block it from accessing its cash, according to a Reuters report.
"Not only has the bank been taken, all the cash has been taken," the financial group's lawyer James Bromley said at the hearing.
The lawyers also said that the FDIC has stopped communicating with the financial group and has instructed the successor of SVB to claw back transfers that SVB Financial had made to other accounts, the WSJ first reported.
SVB Financial lost access to its deposits one day before it filed for bankruptcy protection, the lawyers added. The group made the chapter 11 bankruptcy filing last Friday, one week after regulators shut down SVB in what was the largest US bank failure since 2008.
But a lawyer for the FDIC clapped back against the claims during the Tuesday court hearing and said there was nothing improper that was being done by the regulator.
"There was nothing wrong with freezing accounts and trying to protect deposits," said Kurt Gwynne, a lawyer for the FDIC.
The now collapsed California-based bank made up over $15.5 billion of SVB Financial's total assets of $19.7 billion – making it the group's largest asset, per Reuters.
SVB Financial has not immediately responded to requests for comment. FDIC told Insider it does not comment on legal proceedings.
- Goa partners with World Bank to tackle sea level rise, coastal erosion and other climate change-related hazards
- Samsung unveils Galaxy Ring with health-tracking features at MWC
- Govt may look at enhanced KYC requirements for certain class of corporates
- Sebi cautions investors against fraudulent trading platforms offering stock mkt access via FPI route
- Fuel your weight gain journey with these 7 drinks