SVB Financial Challenges FDIC Over Alleged $2B Funds Freeze

SVB Financial Group filed for bankruptcy on Friday, and in court filings accused the FDIC of “improper actions” to cut off access to 2 billion dollars deposited at its former banking unit Silicon Valley Bank. The company claims that the FDIC had no legal justification or authority to freeze these funds, which have been held since June 2020.

The filing states that SVB Financial has suffered significant financial losses due to this action by the FDIC and is seeking damages from them as a result. They allege that their reputation has also been damaged due to this incident and are asking for compensation accordingly.

The case will be heard in federal court next month with both sides presenting evidence as part of their respective arguments. It remains unclear how long it will take before a decision is made but it could potentially impact other companies who may find themselves in similar situations if they believe they too have been wronged by government agencies, such as the FDIC.