First Citizens sues HSBC for hiring away Silicon Valley Bank staff

First Citizens Bancshares (Tennessee)

22/05/2023 18:54

By Daniel Wiessner
       May 22 (Reuters) - First Citizens BancShares Inc
 FCNCA.O , which acquired Silicon Valley Bank following its
collapse, sued HSBC Holdings PLC  HSBA.L  on Monday, accusing it
of illegally poaching more than 40 of the failed bank's
employees. 
    The lawsuit filed in San Francisco federal court says HSBC
violated federal law by hiring away the workers in order to
improperly gain access to Silicon Valley Bank's (SVB) trade
secrets.
    First Citizens in the lawsuit said it is seeking more than
$1 billion in damages. 
    HSBC did not immediately respond to a request for 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 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. 
    Monday's lawsuit names as defendants HSBC and six former SVB
employees including David Sabow, who most recently led SVB's
technology and healthcare banking segment. First Citizens claims
those employees orchestrated the scheme to poach about 40 other
SVB staffers and steal the bank's business. 
    "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. 

 (Reporting by Daniel Wiessner in Albany, New York, Editing by
Alexia Garamfalvi and Conor Humphries)
 ((daniel.wiessner@thomsonreuters.com))