FDIC Ordered to Face SVB Financial Suit Seeking $1.9 Billion

A federal judge in California has ruled the Federal Deposit Insurance Corp. must face a lawsuit seeking the return of $1.93 billion the government agency seized after the collapse of Silicon Valley Bank in 2023.

The FDIC, which insures bank deposits, failed to adequately oppose a claim that it owes those funds to the bank’s former parent, Silicon Valley Bank Financial Trust, US District Judge Beth Labson Freeman said in a written order Thursday.

The trust alleged in the suit that its inability to recoup the money under the FDIC’s control “was tantamount to theft.”

“Although these allegations supporting ‘control’ ...