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First Citizens BancShares Inc., which owns Silicon Valley Bank after its collapse, sued HSBC Holdings PLC on Friday, accusing it of illegally poaching more than 40 bank employees who failed to start their own US banking business.
The lawsuit filed in San Francisco federal court alleges that HSBC violated federal law by hiring employees to access Silicon Valley Bank’s (SVB) trade secrets, including information about clients in the technology and healthcare sectors.
First Citizens in the lawsuit said it was seeking more than $1 billion US ($1.3 billion Cdn) in damages.
HSBC spokesman Matthew Ward declined to comment.
Schemes include former SVB workers, suit claims
The US Federal Deposit Insurance Corporation took over SVB on March 10 after depositors rushed to withdraw money at the bank that also crippled Signature Bank and wiped more than half the market value of several other US regional lenders.
The first citizens later in March bought the assets of SVB and deposited up to $ 500 million in savings – a fraction of what the bank was worth before it failed.
HSBC acquires separately the UK arm of SVB.
The first citizen in the lawsuit was claims that David Sabow, who led SVB’s technology and health-care banking and moved to HSBC in March shortly after the bank collapsed, orchestrated the alleged plan to steal SVB’s business.
First Citizens said 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 streamlined the normally expensive and lengthy process of doing things like market research and developing competent financial projections needed to launch a commercial banking business,” First Citizens said in the lawsuit.
In April, HSBC said it had hired dozens of Silicon Valley Bank employees to help the bank create a specialized practice focused on serving companies in technology and health care, as well as investors who support them.
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