HSBC must face US$1 billion suit over hiring bankers from SVB: US court
FIRST Citizens Bank & Trust can proceed with a US$1 billion lawsuit accusing HSBC Holdings of poaching dozens of employees and stealing trade secrets from Silicon Valley Bank (SVB) shortly after its acquisition by First Citizens.
A San Francisco federal magistrate judge on Wednesday (Jan 10) denied HSBC’s request to dismiss the suit, saying North Carolina-based First Citizens plausibly alleged that HSBC and other defendants breached contracts and misappropriated information.
US magistrate judge Laurel Beeler allowed the case to move ahead but said First Citizens needed to amend its complaint within 28 days to address some deficiencies and clarify the alleged roles of HSBC and other defendants.
“At minimum, the complaint is confusing and needs to be cleaned up,” she wrote.
HSBC said in a statement it “is strongly committed to the innovation banking space and to our employees, and will continue to vigorously defend against the lawsuit brought by First Citizens”.
In its May lawsuit, First Citizens alleged that HSBC and David Sabow, a former SVB healthcare and technology banker, orchestrated a scheme dubbed “Project Colony” to recruit 42 bankers and steal confidential data from SVB two weeks after its acquisition by First Citizens.
First Citizens asked for more than US$1 billion in damages for its breach of contract and civil conspiracy claims.
The March collapse of SVB following a wave of withdrawals by the tech startups and venture capital firms that formed its client base was the biggest US bank failure in more than a decade and presaged a banking crisis that engulfed several other financial institutions. First Citizens acquired SVB two weeks after it was put into receivership.
HSBC has argued that its recruitments were not unlawful as First Citizens’ acquisition did not encompass rights or obligations covered by SVB employment agreements. BLOOMBERG
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