First Citizens sues HSBC for stealing SVB staff

First Citizens BancShares, which acquired Silicon Valley Bank following its collapse, has sued HSBC (0005), accusing it of poaching more than 40 of the failed bank's employees in order to launch its own US venture banking business.

The lawsuit filed in San Francisco federal court says HSBC violated federal law by hiring away the workers so it could gain access to SVB's trade secrets, including information about clients in the tech and healthcare sectors.

First Citizens in the lawsuit says it is seeking more than US$1 billion (HK$7.8 billion) in damages.

The US Federal Deposit Insurance Corporation took over SVB on March 10 after depositors rushed to pull out their money in a bank run that also brought down Signature Bank and wiped out more than half the market value of several other US regional lenders.

First Citizens later in March purchased SVB's assets and deposits for up to US$500 million in stock - a fraction of what the bank was worth before it failed.

HSBC separately acquired SVB's UK arm.

First Citizens in the lawsuit claims that David Sabow, who led SVB's technology and healthcare banking segment and moved to HSBC in March after the bank's collapse, orchestrated the alleged scheme to steal SVB's business.

First Citizens says Sabow and five other former SVB officials - all of whom are named as defendants in the lawsuit - convinced about 40 other SVB employees to jump to HSBC in April.

"HSBC and Sabow short-circuited the normally expensive and lengthy process to do things such as conduct market research and develop competent financial projections necessary for launching a commercial banking business," First Citizens says in the lawsuit.

In April, HSBC said it had hired dozens of SVB employees to help the bank establish a dedicated practice focused on serving companies in technology and healthcare and on investors who support them.

Separately, the Hong Kong and Shanghai Banking Corporation has appointed Edward Cheng Wai-sun, deputy chairman and chief executive at Wing Tai Properties (0369), as its independent non-executive director.

Cheng will also be a member of the bank's remuneration committee and risk committee, according to a statement.