united-states tort banking
Can a bank sue someone that disseminates information that starts a bank run that destroys the bank?
<p>Specifically, could Silicon Valley Bank sue the Founders Fund and other VCs that had companies they invested in withdraw their funds?</p>
<p>Has any bank ever successfully done this?</p>
<p>To clarify, I'm not asking about the act of withdrawing funds, but encouraging others to do so.</p>

<blockquote>
<p>Can a bank sue someone that starts a bank run that destroys the bank?</p>
</blockquote>
<p>No (assuming, of course, as is the usual case, that the person who starts the bank run is not engaged in perpetrating a defamatory falsehood).</p>
<p>Most bank runs are, and certainly the Silicon Valley Bank bank run was, based upon wide disclosure of a true fact. In the case of SVB, the bank run was triggered by the fact that its balance sheets failed to reflect the true value of fixed nominal rate bonds that it held as assets.</p>
<p>In the usual case, a lawsuit also isn't a very helpful option to a bank that suffers a bank run. In the case of SVB, the bank had a book value (which is often a fair measure of a bank's value since its assets are so monetized) of $34 billion which was reduced to a pittance by the run on it. Even if someone who started a run on the bank had a moderately high net worth of $3.4 million that could be collected in a money judgment, that would cover a mere 0.01% of the loss to the bank, and there would be serious issues over the causation of any loss (i.e. how much of the losses suffered bound to occur sooner or later anyway due to causes unrelated to someone who triggered a panic).</p>
<p>Another fine point of procedure is that when a bank becomes insolvent, it is promptly taken over by the FDIC or similar regulatory agency, which installs a receiver. This makes it effectively impossible for the bank itself to sue anyone. If the bank would otherwise have had a right to sue, the receiver for the bank would have the right to sue rather than the bank itself. But, this subtly while not irrelevant, doesn't capture the core reason for the question.</p>

<p><a href="/questions/tagged/netherlands" class="post-tag" title="show questions tagged &#39;netherlands&#39;" aria-label="show questions tagged &#39;netherlands&#39;" rel="tag" aria-labelledby="tag-netherlands-tooltip-container">netherlands</a></p>
<p>In The Netherlands, <a href="https://en.wikipedia.org/wiki/DSB_Bank" rel="nofollow noreferrer">DSB Bank</a> went bankrupt after investigator Pieter Lakeman, representative of a foundation of unsatisfied customers of the bank, called for a bank run, his argument being that it would allow for better handling of the cases of the victims he represented.</p>
<p>According to professor Doorenbos, as quoted in <a href="https://www.volkskrant.nl/economie/dsb-oproep-lakeman-mogelijk-misdrijf%7Eb5a66b15/" rel="nofollow noreferrer">an article in <em>De Volkskrant</em></a> (in Dutch), Lakeman could be prosecuted on basis of three separate articles of Dutch law, neither of which are specific for bank runs.</p>
<ul>
<li>Article 142, causing a disturbance by a false alarm or signal</li>
<li>Article 261 (incorrectly identified as 126 in the article), defamation</li>
<li>Article 334 (incorrectly identified as 324 in the article), influencing share prices with false information</li>
</ul>
<p>He was, however, never prosecuted.</p>
<p>As a reaction to the actions of Lakeman and the following bank run on and bankruptcy of DSB Bank, a law was proposed that would've made it illegal to call for a bank run. The proposal seems to have died quietly.</p>

<p>I recall an actual case where there was a threat to prosecute: it was over 35 years ago in Auckland, where I was living at the time.</p>
<p>A woman who was a customer of the Building Society attempted to withdraw a large amount of money while visiting a branch in another city. They asked for some time to check with Auckland before allowing the withdrawal (this was the late 1980s before most people had mobile phones or Internet access). Instead she called up a talkback radio show and said that the building society was in trouble and wasn't honouring deposits, thereby starting a run.</p>
<p>As I recollect, some other banks extended a line of credit to the building society, as they saw the potential for themselves to be victims of similar behaviour in the future. After a couple of days, most people who had withdrawals funds realized that they had been silly, and put the money back (the building had been paying a high rate of interest). There was some talk of suing the woman, but I'm not sure of the outcome, as I left the country soon  after. If they sued, the outcome would have depended on malice vs stupidity.</p>
