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The Federal Deposit Insurance Corporation (FDIC) filed a massive lawsuit today targeting 17 former executives and directors of Silicon Valley Bank (SVB), accusing them of gross negligence and fiduciary failures that triggered the bank’s spectacular March 2023 collapse. The lawsuit names former CEO Gregory Becker, ex-CFO Daniel Beck, and 15 others. The FDIC, acting as SVB’s receiver, says the defendants ignored basic banking principles and internal risk policies. Instead, they allegedly chased profits and a higher stock price, exposing the bank to “catastrophic risks,” according to the court documents. Risky bets and a $294 million dividend At the heart of the FDIC’s allegations is a series of poor decisions tied to interest rates and liquidity management. Silicon Valley Bank was heavily reliant on long-term government bonds, including U.S. Treasuries and mortgage-backed securities, which were sensitive to rising interest rates. When the Federal Reserve began hiking rates in response to inflation, these assets plummeted in value, slashing SVB’s ability to cover liabilities. The FDIC also criticized a “grossly imprudent” $294 million dividend payment made to SVB’s parent company in December 2022. By draining the bank’s capital just three months before its collapse, the payment left SVB vulnerable at a time when it desperately needed cash to stay afloat. Defendants fight back Lawyers for Laura Izurieta, SVB’s former Chief Risk Officer, pushed back hard against the allegations. Izurieta left the bank in April 2022, nearly a year before the meltdown. Her legal team called her inclusion in the suit “outrageous,” claiming she provided sound advice on risk management before her departure. Other defendants, including Becker, have not publicly commented, though Reuters reports that Becker’s legal team said he was traveling and unavailable. Silicon Valley Bank’s downfall began on March 8, 2023, when the bank announced it had sold $21 billion worth of…