“Hope doesn’t count when you are working with a restructured company that’s working on borrowed time.”
Kenneth J. Malek, of Malek Capital Advisors, LLC, quoted by the U.S.D.C. (N.D. Cal.) in SVB Financial Trust v. FDIC-R for Silicon Valley Bank. The Court, in its Findings of Fact and Conclusions of Law (Aug. 29, 2026), denied SVB Financial Trust’s claim for $1.7 billion against the FDIC, finding that SVB Financial Group took excessive interest rate risk by (1) investing in long-term fixed-rate securities, (2) over-designating the securities as held-to-maturity, and (3) terminating interest-rate hedges while retaining the underlying securities. The Court also found that SVB Financial Group authorized a constructive fraudulent transfer in the amount of $294 million.
Tasked with quantifying losses on over $90 billion of long-term fixed-rate securities during the relevant time period, and ascertaining the solvency of Silicon Valley Bank as of the date of the fraudulent transfer, Malek Capital Advisors determined that $32 billion in securities purchases were made in violation of SVB Financial Group’s interest-rate risk thresholds.
