Ex-SVB Officers Lose FDIC Fight to Use Stronger Liability Shield

Former officers of Silicon Valley Bank and its parent company can’t shield themselves from liability using a “business judgment rule” in a $1.7 billion fight with the Federal Deposit Insurance Corp., a federal court ruled.

The conduct of former corporate officers of Silicon Valley Bank and its holding company can be evaluated under a lower ordinary negligence standard instead of a higher gross negligence standard, Judge Beth Labson Freeman of the US District Court for the Northern District of California in a partial summary judgment Monday.

Under California law, directors are protected by the business judgment rule, a higher standard ...