The offices of SVB Private, as Boston Private Bank & Trust was rebranded following its purchase by Silicon Valley Bank, in Boston's Back Bay. Banker & Tradesman file photo
More than a year after Boston Private was acquired by the parent company of Silicon Valley Bank, a federal judge in Boston has dismissed a proposed class action lawsuit filed by shareholders who claimed the bank’s decision to merge had caused them harm.
Filed in September 2021, the lawsuit alleged that the bank’s proxy filings leading up to the merger violated securities laws by including false or misleading statements, omissions and half-truths. The civil case, known as Richard Savoy v. Boston Private Financial Holdings Inc., et al, made claims against the bank, then-CEO Anthony DeChellis and former board members.
Boston Private’s agreement to sell itself to SVB Financial Group, which was announced in January 2021, faced opposition from the outset. Activist shareholder HoldCo Asset Management launched an aggressive campaign to stop the deal, arguing that Boston Private did not go through an adequate sales process and that the valuation price for the merger was not acceptable.
The proposed class action suit expanded on HoldCo’s arguments, making multiple claims that the bank misled shareholders.
In some instances, though, HoldCo’s statements, which Boston Private had included with its securities filings leading up to a shareholder vote on the merger, worked against the plaintiffs.
In one part of the lawsuit, plaintiffs had argued that Boston Private misled shareholders by highlighting the positive aspects of a third-party recommendation from Institutional Shareholder Services of the proposed merger without pointing to negative observations made by ISS. Plaintiffs had claimed that failing to disclose the negative observations was unlawful. The judge disagreed.
“The claim that Boston Private’s description of the ISS recommendation was a half-truth is plausible,” Judge Patti Saris wrote in her decision. “However, HoldCo made the negative observations available to shareholders, and they were part of the total mix of information available to shareholders during the proxy battle.”
After a court hearing on the case, Saris granted Boston Private’s motion to dismiss the lawsuit in a decision released last week.
