This series has been written by Hima Sutha
The FDIC and HSBC takeover and what it means
Since FDIC now took control over SVB, SVB’s clients who deposited their money in the bank
will not be impacted negatively and will receive at least $250,000 of their deposits instantly.
Therefore, all clients based in the United States will receive financial support from the US
government.
On March 14th, 2023, the UK division of SVB was acquired by HSBC – a British multinational
bank – for £1.21. SVB’s UK customers’ deposits are now safe with HSBC, and they can continue
to bank with HSBC now.
The whole process of HSBC taking over SVB’s UK division happened one Sunday night- March
12th, 2023, in 11 hours! First, HSBC’s management team worked on understanding SVB’s UK
client base and their credit ratings – the ability of the clients to pay back the money to the bank.
Then, after evaluating, they decided to take over SVB for £1.21.
The class action lawsuit
A class action lawsuit against SVB Financial Group, SVB’s CEO Greg Becker, and CFO Daniel
Beck has been filed in the US district court for the Northern District of California. Since the
company failed to inform its clients and investors regarding the risks of Fed’s interest rates on
its performance and other details, Chandra Vanipenta – one of the shareholders, decided to
represent all the shareholders and filed a lawsuit.
Filing for Bankruptcy
On March 17th, SVB filed for bankruptcy in a US Court.
The previous parts of this series can be read: