US Appeals Court Revives Signature Bank Lawsuit Against Execs, Auditor
A US appeals court has revived a lawsuit against former Signature Bank executives and its auditor KPMG, allowing investors to pursue securities fraud claims related to the bank's collapse in March 2023.
The Second Circuit Court of Appeals ruled that the FDIC's role as receiver for the defunct bank does not strip investors of their right to sue. The decision reopens a case that traces a stock price collapse from roughly $70 to $0.09, one of the more dramatic wipeouts in recent banking history.
The lawsuit alleges that Signature Bank's leadership made inaccurate statements about the institution's liquidity position and risk management practices. Specifically, the suit claims executives downplayed how exposed the bank was to concentration risk from its crypto depositor base and failed to adequately disclose vulnerabilities in its funding model.