SAN DIEGO (Legal Newsline) - A group of retirement systems will lead class action litigation against Silvergate Capital over a drop in the banking institution's stock price.
San Diego federal judge Cathy Ann Bencivengo made that decision Feb. 28, which led to the selection of Bernstein Litowitz and Cohen Milstean as lead counsel for the litigation.
The only other lead plaintiff candidate, a company called Goldberg Flores represented by the firm Saxena White, said it lost $646,535 in the stock drop, but filed a notice of non-opposition to the motion filed by the institutional investors.
Those investors are the International Union of operating Engineers, Local No. 793, Members Pension Benefit Trust of Ontario; UMC Benefit Board and Wespath Institutional Investments, both as trustees of the Wespath Funds Trust; the Indiana Public Retirement System; the Boston Retirement System; and the Public School Teachers' Pension & Retirement Fund of Chicago.
That group collectively says it lost $18.2 million.
According to the complaints, Silvergate, a federally regulated banking institution, allows customers to send U.S. dollars and euros with its Silvergate Exchange Network. The plaintiffs claim that throughout the class period, Silvergate touted its regulatory compliance program including anti-money laundering polices.
They further claim that beginning in November of 2022, Silvergate made several announcements and disclosures including the company's lack of compliance practices, the demotion of its chief risk officer and the run on Silvergate Bank which led to an $8.1 billion deposit decline and the need to borrow $4.3 billion from Federal Home Loan Banks.
The plaintiffs allege Silvergate's misrepresentations caused a nearly $10 per share stock price decline.