SVB Parent and FDIC Go to Trial Over $1.7 Billion in Deposits

Silicon Valley Bank was closed and taken over by the Federal Deposit Insurance Corporation on March 10, 2023, and its parent, SVB Financial Group, filed for bankruptcy a week later. Its successor, SVB Financial Trust, is seeking the return of roughly $1.7 billion left at the bank. The outcome will affect recoveries for bankruptcy creditors and losses to the FDIC’s Deposit Insurance Fund.

The trial began on June 29, 2026, in the U.S. District Court for the Northern District of California. At issue is whether the FDIC can offset the $1.7 billion deposit based on alleged mismanagement. The FDIC accuses management of buying large amounts of long-dated fixed-income securities, selling hedging positions and paying $294 million in dividends in the months before the collapse. The trust argues that the decisions were reasonable. The trial is expected to last several weeks, with more former senior executives due to testify.