SVB Financial accuses the FDIC of “wrongdoing” to block the firm from accessing its $2 billion in cash.
- The parent company of Silicon Valley Bank said it could not access the $2 billion it deposited with the failed bank.
- SVB Financial filed for bankruptcy on Friday.
- Now he’s accusing federal regulators of doing “wrongdoing” to block access to his cash.
Recent bankruptcy filings show a brewing fight between parent company Silicon Valley Bank and US federal regulators.
SVB Financial Group, SVB’s former parent company, said it was unable to access its $2 billion cash deposited with a bankrupt bank that was confiscated by the Federal Deposit Insurance Corporation.
Lawyers for SVB Financial said at the group’s first bankruptcy hearing in Manhattan on Tuesday that the FDIC took “wrongful actions” to block access to its funds, according to a Reuters report.
“Not only the bank was taken, but all the cash,” said James Bromley, a lawyer for the financial group, at the hearing.
Lawyers also said the FDIC has stopped communicating with the financial group and instructed SVB’s successor to withdraw transfers that SVB Financial had made to other accounts, the WSJ reported for the first time.
The lawyers added that SVB Financial lost access to its deposits the day before it filed for bankruptcy protection. The group filed for Chapter 11 bankruptcy last Friday, a week after regulators shut down SVB in what was the largest U.S. bank failure since 2008.
But an FDIC lawyer objected to the claims during Tuesday’s court hearing and said the regulator was not doing anything improper.
“There is nothing wrong with freezing accounts and trying to protect deposits,” said Kurt Gwynn, an FDIC lawyer.
The now-failed California bank accounted for more than $15.5 billion of SVB Financial’s total assets of $19.7 billion, making it the group’s largest asset, according to Reuters.
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