US-based crypto exchange Kraken has announced plans to expand its products with intention to expand globally too.
A class action lawsuit has been filed against Signature Bank, a York-based financial institution, as well as its former CEO, CFO, and COO, for allegedly committing fraud. The US District Court filed the lawsuit for the Eastern District of New York. The motion is on behalf of shareholders who purchased Signature Bank stock between January 2016 and November 2019.
The lawsuit alleges that Signature Bank made false and misleading statements. The lawsuit states that the bank made false claims about the bank’s loan portfolio and credit risk management practices. Specifically, the complaint alleges that the defendants overstated the quality of the bank’s loans, understated its allowance for loan losses, and failed to disclose that the bank was not in compliance with certain banking regulations.
According to the complaint, these actions caused the bank’s stock price to be artificially inflated. It resulted in major financial harm to shareholders when the truth was revealed about the bank’s loan portfolio.
The lawsuit seeks to recover damages on behalf of shareholders who purchased stock from the crypto-friendly Signature Bank during the relevant time period. Several law firms specialising in securities litigation will be representing the plaintiff.
Signature Bank intends to defend itself
In response to the lawsuit, Signature Bank has stated that it intends to vigorously defend itself against the allegations. The bank has also emphasised its commitment to transparency and compliance with all relevant banking regulations.
Former US Representative Barney Frank commented on the closure of Signature Bank. Frank, who also is a board member of the bank, noted that this seems to be a regulators looking to show a “very strong anti-crypto” stance. In an interview his CNBC, Frank commented:
“I think part of what happened was that regulators wanted to send a very strong anti-crypto message… We became the poster boy because there was no insolvency based on the fundamentals.”
The class action lawsuit against Signature Bank highlights the importance of transparency and accurate reporting in the financial industry. As investors increasingly rely on information provided by companies to make investment decisions, it is essential that companies provide accurate and complete information to avoid potential legal action and protect the interests of their shareholders.