Silvergate hit with another class-action suit, this time for securities law violations
A class-action suit was filed against Silvergate Capital, operator of the Silvergate Exchange Network and parent company of Silvergate Bank, in United States District Court of Southern California on Jan. 10. The suit was filed on the behalf of all purchasers of Silvergate securities between November 9, 2021, and January 5, 2023, claiming violations of the Securities Exchange Act of 1934.
Silvergate CEO Alan Lane and chief financial officer Antonio Martino were also listed as defendant in the suit. The plaintiff claimed in the suit that Silvergate’s platform failed to detect occurrences of money laundering “in amounts exceeding $425 million,” for which the company was likely to face regulatory repercussions. The legal papers allege:
Furthermore, “Defendants knew that the public documents and statements issued or disseminated in the name of the Company were materially false and/or misleading.”
The claim that the company was involved in the transfer of $425 million to “South American money launderers” is based on a Nov. 15 tweet by Marcus Aurelius Research. That tweet and the Bear Cave newsletter issue of Nov. 17 that mentioned the same issue allegedly contributed to a significant fall in the Silvergate share price. After a Silvergate press release revealed that digital asset deposits at the bank had decreased 68% in the last quarter of 2022, from $11.9 billion to $3.8 billion, the share price declined further.
$SI Recently 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 (we are short):https://t.co/8Cyz5QiXei pic.twitter.com/qa2IaeKFGa
Silvergate shares are
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