FDIC Granted Dismissal of Suit by Signature Bank Shareholders

The Federal Deposit Insurance Corporation, rather than shareholders of Signature Bank, has standing to sue the bank’s auditor, KPMG LLP, for securities fraud after the crypto-friendly bank failed, a New York federal court said.

The FDIC as receiver of Signature Bank is the only party with standing under the Financial Institutions Reform, Recovery, and Enforcement Act’s succession clause, Judge Frederick Block of the US District Court for the Eastern District of New York said March 21 in a consolidated case.

Block rejected the argument that the succession clause distinguishes between derivative and direct claims. Though the Second Circuit ...