First Citizens claims HSBC execs knew of plot to poach Silicon Valley Bank workers

First Citizens Bancshares (Tennessee)

08/02/2024 18:38

By Daniel Wiessner
       Feb 8 (Reuters) - First Citizens BancShares  FCNCA.O 
claims in a new court filing that executives at HSBC Holdings
 HSBA.L , including CEO Noel Quinn, condoned a plan to steal
employees and confidential information from Silicon Valley Bank
after it collapsed last year and was acquired by First Citizens.
    In an amended lawsuit filed in San Francisco federal court
on Wednesday, First Citizens said David Sabow, who led SVB's
technology and healthcare banking segment before moving to HSBC,
met with Quinn and other top executives numerous times and
shared plans to poach workers in order to launch a competing
venture capital business. 
    First Citizens had initially filed the $1 billion lawsuit
against HSBC, Sabow and others last May. A federal judge in
January declined to dismiss the case but ordered North
Carolina-based First Citizens to "clean up" its complaint,
saying it was unclear what role some of the defendants played in
the alleged scheme. 
    The bank says Sabow and five other former Silicon Valley
Bank officials took client information and other trade secrets
and convinced more than 40 employees of the failed bank to jump
to HSBC last April. According to the new complaint, the trade
secrets allegedly included profit data, estimates of the value
of individual clients to the bank, and reports on employees'
performance and potential. 
    HSBC in a statement said it is "strongly committed to the
innovation banking space and to our employees, and will continue
to vigorously defend against the lawsuit brought by First
Citizens."
    In court filings, HSBC has denied wrongdoing and said
Sabow's efforts to recruit from Silicon Valley Bank, which had
about 8,500 employees when it collapsed, were legitimate and
predated First Citizens' takeover of the bank. 
    Many other former Silicon Valley Bank staffers and
executives have reportedly joined JPMorgan Chase and investment
bank Stifel, among other firms. 
    The U.S. Federal Deposit Insurance Corporation took over
Silicon Valley Bank in March after a bank run in which
depositors rushed to pull out their money.
    First Citizens then purchased Silicon Valley Bank's assets
and deposits for a fraction of what the bank was worth before it
failed. HSBC last year separately acquired the lender's UK arm
and said it had hired dozens of SVB employees to help the bank
set up a dedicated practice focused on serving technology and
healthcare companies and investors who support them.

 (Reporting by Daniel Wiessner in Albany, New York; Editing by
David Gregorio)
 ((daniel.wiessner@thomsonreuters.com))