First Citizens BancShares, which acquired the failed Silicon Valley Bank after the federal government seized the firm in March, is suing British banking giant HSBC for allegedly illegally hiring more than 40 SVB employees to launch a venture banking business—which First Citizens claims should entitle it to $1 billion in damages.
A file picture of a sign outside a branch of the HSBC Bank, Croydon, Surrey, Britain, Thursday March ... [+]
A complaint filed by First Citizens in U.S. District Court in San Francisco alleged that by poaching employees through the use of “confidential, proprietary and trade secret information,” HSBC committed a breach of contract and secured a cross section of SVB’s operational knowledge and an unfair competitive advantage.
David Sabow led technology and healthcare banking for SVB before joining HSBC in April—he is said in the complaint to have helped HSBC identify six core leaders and 35 SVB professionals to hire.
First Citizens added in its complaint that HSBC and Sabow “short-circuited” the lengthy and expensive process needed to launch a commercial banking business.
HSBC did not immediately respond to a request for comment from Forbes.
First Citizens purchased $72 billion worth of assets from SVB at a discounted price of $16.5 billion after the bank’s collapse in March. That month, the bank was shut down after investors pulled out large amounts of money following an announcement that it was suffering major losses. First Citizens has acquired more than 20 failed banks through mergers or purchases since the 2008 housing crisis. HSBC, like First Citizens, was involved in picking up the pieces of SVB after its failure. In April, HSBC announced that it hired several SVB bankers to help the bank establish a “dedicated banking practice” venture focused on serving tech and healthcare companies, as well as investors.
$1.21. That is how much HSBC purchased the U.K. arm of SVB for in a March deal that excluded the assets and liabilities of SVB U.K. 's parent company.
Bank that bought Silicon Valley Bank sues HSBC for poaching staff (CBC)
First Citizens Sues HSBC for Stealing SVB Staff, Secrets (Bloomberg)
First Citizens Bank Buying SVB—Here Are Other Failed Banks It Acquired (Forbes)