First Citizens sues HSBC for hiring away Silicon Valley Bank staff
2023.05.22 14:41
© Reuters. FILE PHOTO: The HSBC bank logo is seen in the Canary Wharf financial district in London, Britain, March 3, 2016. REUTERS/Reinhard Krause
By Daniel Wiessner
(Reuters) -First Citizens BancShares Inc, which acquired Silicon Valley Bank following its collapse, sued HSBC Holdings (NYSE:) PLC on Monday, accusing it of poaching more than 40 of the failed bank’s employees in order to launch its own U.S. venture banking business.
The lawsuit filed in San Francisco federal court says HSBC violated federal law by hiring away the workers so it could gain access to Silicon Valley Bank’s (SVB) trade secrets including information about clients in the tech and healthcare sectors.
First Citizens in the lawsuit said it is seeking more than $1 billion in damages.
HSBC spokesman Matthew Ward declined to comment.
The U.S. Federal Deposit Insurance Corporation took over SVB on March 10 after depositors rushed to pull out their money in a bank run that also brought down Signature Bank (OTC:) and wiped out more than half the market value of several other U.S. regional lenders.
First Citizens later in March purchased SVB’s assets and deposits for up to $500 million in stock – a fraction of what the bank was worth before it failed.
HSBC separately acquired SVB’s UK arm.
First Citizens in Monday’s lawsuit claims that David Sabow, who led SVB’s technology and healthcare banking segment and moved to HSBC in March shortly after the bank’s collapse, orchestrated the alleged scheme to steal SVB’s business.
First Citizens says Sabow and five other former SVB officials, all of whom are also named as defendants in the lawsuit, convinced about 40 other SVB employees to jump to HSBC in April.
“HSBC and Sabow short-circuited the normally expensive and lengthy process to do things such as conduct market research and develop competent financial projections necessary for launching a commercial banking business,” First Citizens said in the lawsuit.
In April, HSBC had said it had hired dozens of Silicon Valley Bank employees to help the bank establish a dedicated practice focused on serving companies in technology and healthcare and investors who support them.
