First Citizens BancShares Inc, which acquired Silicon Valley Bank following its collapse, sued HSBC Holdings PLC 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 US ($1.3 billion Cdn) in damages.
HSBC did not immediately respond to a request for comment.
Scheme included former SVB workers, suit claims
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 U.K. arm.
Monday’s lawsuit names as defendants HSBC and six former SVB employees, including David Sabow, who most recently led SVB’s technology and health-care 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 health care, as well as investors who support them.