Silvergate Capital Corporation
The law firm of Kirby McInerney LLP announces that a class action lawsuit has been filed in the U.S. District Court for the Southern District of California on behalf of those who acquired Silvergate Capital Corporation (“Silvergate”) (NYSE: SI) securities between November 9, 2021 through November 17, 2022 (the “Class Period”). Investors have until February 6, 2023 to apply to the Court to be appointed as lead plaintiff in the lawsuit.
Silvergate, through its subsidiary Silvergate Bank, provides a banking platform for innovators, especially in the digital currency industry, as well as developing product and service solutions addressing the needs of entrepreneurs.
On November 15, 2022, Marcus Aurelius Research tweeted that “[r]ecently subpoenaed Silvergate bank records reveal $425 million in transfers from $SI crypto bank accounts to South American money launderers. Affadavit from investigation into crypto crime ring linked to smugglers/drug traffickers.” On this news, the price of Silvergate shares declined by $6.13 per share, or approximately 17.27%, from $35.49 per share to close at $29.36 on November 15, 2022.
On November 17, 2022, The Bear Cave newsletter released an article about several companies with potential exposure to recently collapsed cryptocurrency exchange FTX, including Silvergate. The article highlighted the connection linking Silvergate to a money laundering operation that transferred $425 million off cryptocurrency trading platforms. On this news, the price of Silvergate shares declined by $3.00 per share, or approximately 10.75%, from $27.90 per share to close at $24.90 on November 18, 2022.
The lawsuit alleges that, throughout the Class Period, Defendants made false and/or misleading statements and/or failed to disclose that: (1) the Company’s platform lacked sufficient controls and procedures to detect instances of money laundering; (2) Silvergate’s customers had engaged in money laundering in amounts exceeding $425 million; and (3) as a result of the foregoing, the Company was reasonably likely to receive regulatory scrutiny and face damages, including penalties and reputational harm.