Goldman Sachs and KPMG Sued Over SVB Collapse
We previously reported that the Stanford-founded Silicon Valley Bank (SVB) was recently hit with multiple lawsuits involving several former clients. The banks had allegedly failed to protect their clients’ investments during their COVID-19 induced financial collapse. Now, Goldman Sachs and KPMG are being sued over SVB’s collapse.
The lawsuit, filed in the U.S. District Court for the Central California District, accuses Goldman Sachs Group Inc., KPMG LLP and auditors from SVB of “negligence and professional malpractice” in failing to protect the bank’s investment capital.
The suit claims that “SVB’s collapse was preventable and the result of more than a decade of mismanagement by its officers, directors, and executives; inadequate oversight by its outside auditors; inadequate oversight by its investment bankers (Goldman Sachs); and inadequate oversight from the rating agencies it hired (KPMG).”
The lawsuit is asking for an unspecified amount of damages. It claims that Goldman Sachs and KPMG were aware of SVB’s financial distress but failed to act accordingly or provide adequate warnings to potential investors.
This is not the first time Goldman Sachs has been accused of negligent behavior. The bank has been involved in numerous lawsuits which accuse them of fraud or misselling financial products.
KPMG, on the other hand, has also faced its own share of legal troubles over its past accounting practices.