Regulator sued in its capacity as the receiver for a defunct bank
New York City has taken legal action against the Federal Deposit Insurance Corp. (FDIC) in its capacity as the receiver for the defunct Signature Bank, alleging a shortfall of approximately $44 million in municipal taxes, a Bloomberg report has revealed.
The city’s finance department conducted an audit of Signature Bank after its closure in March, uncovering tax discrepancies spanning from 2015 to 2021. These irregularities pertained to unreported income allocations, as well as adjustments to investment and capital income. The lawsuit, filed in federal court in Manhattan on Monday, outlines these findings.
The lawsuit follows a similar legal move earlier this month when New York City pursued over $2.1 million in overdue taxes from Silicon Valley Bank, which collapsed shortly before Signature Bank in March 2023. The city’s finance department initiated legal proceedings after the FDIC rebuffed New York’s request for payment of back taxes in July.
According to Bloomberg, recent allegations of a problematic “boys club” culture within the FDIC have put the agency under scrutiny. Consequently, the regulator has established a special panel to oversee an independent review of FDIC’s workplace culture.
The case is identified as NY v. Federal Deposit Insurance Corp., 24-cv-00629, filed in the US District Court, Southern District of New York (Manhattan).
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