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Signature Bank, executives hit with shareholder lawsuit

Signature Bank, executives hit with shareholder lawsuit

A plaintiffs law firm filed a putative class action lawsuit Tuesday against Signature Bank, which was seized by New York regulators on Sunday, and its directors and officers, charging the defendants with making false and misleading statements.

The suit comes one day after a similar shareholder lawsuit was filed against SVB Financial Group, whose unit Silicon Valley Bank was also taken over by regulators following a surge in deposit withdrawals.

The complaint in Matthew Schaeffer v. Signature Bank, Joseph DePaolo, Stephen Wyremski and Eric Howell, which was filed in U.S. District Court in Brooklyn, states that on March 2 the bank issued a press release that its average balance had increased from the year-end and was followed with a release on Thursday that claimed it was in a strong financial position.

Mr. DePaolo was the bank’s chief executive officer, Mr. Wyremski its chief financial officer and senior vice president and Mr. Howell its chief financial officer, all as of Sunday.

The lawsuit charges violations of federal securities laws and seeks class action status and damages.

The suit was filed by the New York-based Rosen Law Firm PA, which is inviting additional plaintiffs. 

Signature declined to comment on the lawsuit.