Norges Bank Investment Management (NBIM), which last week trumpeted a successful application to co-lead a US class action against the failed Silicon Valley Bank (SVB), said it wanted to be in control of this important case – but has not applied to lead any other collective litigations in the US.
The process against SVB marks the first time the manager of Norway’s NOK16trn (€1.37trn) Government Pension Fund Global (GPFG) has acted as lead plaintiff in a class action. It is bringing the court case alongside co-lead AP7, Sweden’s largest state pension fund.
IPE asked NBIM to spell out why it was advantageous for NBIM to lead class actions, rather than simply to join them.
A spokeswoman for the central bank division said: “There are three main reasons why we applied for a lead position in the SVB class action.”
“First, we had a very significant loss – around $140m [€130m]; second, the holding company is in bankruptcy which minimises the recovery options outside of the class action; third, the conduct here raises significant concerns about the integrity of the financial markets and risk management at large financial institutions,” she said.
“Leading this class action will give us an opportunity to control the conduct of this litigation, decide what claims to bring and against which parties, choose qualified counsel, and – if successful – maximise our and other investors’ recoveries within this class action and enhance corporate governance standards through legal precedent.
“With this amount of loss, we wanted to be in the driver’s seat of this important case,” the NBIM spokeswoman said.
Asked about the class action being led by Swedish state pension fund AP7 against Signature Bank – the subject of another high-profile collapse in this year’s US banking crisis, a third being First Republic Bank. “We have not applied to lead any other class action in the United States,” she said.
NBIM could not comment specifically on its First Republic Bank litigation strategy at this point, she added.
“In general, we seek compensation in all meritorious cases in the United States, but our strategy may vary depending on circumstances unique to each case,” she noted.
At the end of 2022, the GPFG had $138m invested in SVB equities, alongside $16m in the shares of Signature Bank. Its largest exposure was to First Republic Bank however, having held $213m of its equities at the end of last year, according to data on NBIM’s website.
Swedish pension fund Alecta announced yesterday it has been appointed lead plaintiff in the investor class action in the US against First Republic Bank.
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