Illustration shows destroyed SVB (Silicon Valley Bank) logo.
Credit: Reuters Photo
First Citizens BancShares claims in a new court filing that executives at HSBC Holdings , 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.