First Citizens sues HSBC for hiring away Silicon Valley Bank staff (updated)

First Citizens Bancshares (Tennessee)

22/05/2023 19:32

(Adds HSBC's no comment in 4th paragraph and details from
lawsuit in paragraphs 1, 2, 8 and 9)
    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 poaching more than 40 of the failed bank's employees in order
to launch its own U.S. venture banking business. 
    The lawsuit filed in San Francisco federal court says HSBC
violated federal law by hiring away the workers so it could gain
access to Silicon Valley Bank's (SVB) trade secrets including
information about clients in the tech and healthcare sectors.
    First Citizens in the lawsuit said it is seeking more than
$1 billion in damages. 
    HSBC spokesman Matthew Ward declined to 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.
    First Citizens in Monday's lawsuit claims that David Sabow,
who led SVB's technology and healthcare banking segment and
moved to HSBC in March shortly after the bank's collapse,
orchestrated the alleged scheme to steal SVB's business. 
    First Citizens says 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 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))