Attorney advertisingBriefSecurities & Shareholder
Second Circuit revives Signature Bank investors' fraud claims
Responsible attorney: Lou Schwartz, Schwartz & Associates, PC, Atlanta, Georgia. intake@snalawyers.com
The Second Circuit vacated the dismissal of an investor suit against former Signature Bank executives and directors and the bank's auditor, KPMG, which alleges they misrepresented the bank's liquidity and risk management before its March 2023 failure. The court held that the FDIC's succession to a failed bank's stockholder rights under FIRREA does not transfer investors' own Rule 10b-5 claims, which belong to them as purchasers of stock.
Why it matters. In the Second Circuit, an FDIC receivership does not by itself take over failed-bank investors' securities fraud claims.
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