Late last year, I wrote that the the Board of Directors of the Federal Deposit Insurance Corporation had voted unanimously to approve the staff’s request for authorization to file a suit against six former officers and 11 former directors of Silicon Valley Bank and its holding company, SVB Financial Group.  I wasn't surprised because over a year ago, I had pondered  whether the possibility of litigation against the bank's directors and officers.  At the time, I observed that the litigation would likely involve California corporate law:

Because both First Republic Bank and Silicon Valley Bank are California corporations, California corporate law will likely be applied  to suits against directors and officers.  However, the situation is more complex in the case of Silicon Valley Bank because it was a subsidiary of a bank holding company incorporated in Delaware - SVB Financial Group.  Therefore, the applicable law may depend upon whether the director or officer is sued in his or her capacity as a director or officer of the holding company or the bank.  

On January 16, 2025, the FDIC as receiver filed its complaint in the U.S. District Court for the Northern District of California.   According to the complaint the defendants held identical titles at the holding company.  The complaint consists of three counts:

• Gross negligence against both the director and officer defendants;
• Negligence against the officer defendants; and
• Breach of fiduciary duty against both the director and officer defendants.

With respect to the fiduciary duty count, the FDIC is alleging breaches of both the duty of care and the duty of loyalty.  The alleged source of these duties is common law and as to the director defendants, Section 309 of the California Corporations Code.