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A U.S. federal district court has dismissed an about $1.71 billion damages claim filed by SVB Financial Trust, the parent of Silicon Valley Bank, against the Federal Deposit Insurance Corp. after finding SVB management made decisions that exposed the bank to excessive interest-rate and liquidity risk, Reuters reported.
The court found those decisions were a substantial cause of the losses tied to the bank’s 2023 collapse and said the FDIC could not be held liable for losses incurred during the disposal of assets after it took over SVB. The ruling came after a 12-day bench trial, eliminating the possibility that SVB could recover $1.7 billion from the FDIC. The FDIC had previously used the Deposit Insurance Fund, or DIF, to cover costs stemming from SVB’s failure, and the ruling also removed the possibility of additional burdens on the DIF.