KeyCorp Sued for Downplaying Liquidity Issues Amid SVB Collapse

KeyCorp misled investors about subsidiary KeyBank’s liquidity for more than three years, culminating in the stock’s worst selloff since the 2008 financial crisis, a shareholder suit says.

After KeyBank downwardly revised 2023 projections for net interest income, its share price began to decline, the complaint filed in US District Court for the Northern District of Ohio says. The selloff then accelerated as the collapse of Silicon Valley Bank intensified liquidity concerns across the banking sector.

The bank attributed the lower projection for net interest income to deposit beta and funding costs, revising the revenue guidance on March 6 from ...