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California's financial regulator failed to press leadership at Silicon Valley Bank to address known problems quickly enough before the lender imploded in March, according to a report released Monday in which the agency pledged to do better in the future, Reuters reported. The post-mortem by California's Department of Financial Protection and Innovation (DFPI) follows a scathing Federal Reserve report released last month in which the U.S. central bank blamed its own poor oversight, reckless bank management and loosened regulations for contributing to SVB's failure, which now ranks as the third-largest in U.S. history. Regulators have since pledged tougher oversight of the banking sector, while lawmakers have also complained that officials were too slow to address its poor risk management. Former SVB chief executive Gregory Becker is due to testify before Congress next week. According to the report released on Monday, DFPI played a supporting role, with primary oversight for SVB conducted by the Federal Reserve Bank of San Francisco, which could devote more staff to supervision.

SVB Financial bondholders are raising their bets in a bankruptcy court battle with the Federal Deposit Insurance Corp. that they can defeat the agency’s claim to nearly $2 billion that Silicon Valley Bank’s parent company had on deposit with the bank when it failed, WSJ Pro Bankruptcy reported. The FDIC has maintained that it has no obligation to return the cash following its takeover of the bank, but SVB Financial’s $3.4 billion in bonds have rallied as some investors gain confidence that they could see more of a recovery by prevailing over the agency’s claim. When Silicon Valley Bank went under, the FDIC stepped in to make depositors whole, but it made an exception for the deposits of the bank’s parent company, SVB Financial. The parent filed for chapter 11 in March, touching off a legal battle with the FDIC over how to allocate losses stemming from Silicon Valley Bank’s collapse. The FDIC in court filings last week said it isn’t obliged to return the cash that SVB Financial deposited with its banking unit. Distressed-debt investors that scooped up the company’s bonds before and after its bankruptcy are looking to recover the deposited cash from the FDIC, which took an estimated $20 billion loss when Silicon Valley Bank went under. The FDIC has said it could use the nearly $2 billion in its capacity as the failed bank’s receiver to “set off” any legal claims and causes of action it has against the parent company.

Indicted FTX founder Sam Bankman-Fried has renewed his attacks on the bankrupt cryptocurrency exchange’s law firm as he mounts his defense against a raft of fraud, money laundering and campaign-finance charges, Reuters reported. Bankman-Fried late Monday asked a judge to designate FTX’s current leadership and the exchange’s attorneys at law firm Sullivan & Cromwell as part of the “prosecution team” in the criminal case against him. FTX and Sullivan & Cromwell provided such extensive cooperation to the government that prosecutors had “effectively deputized the company to aid the prosecution,” Bankman-Fried argued. The 31-year-old ex-CEO is fighting charges that he stole billions of dollars in customer funds to plug losses at his Alameda Research hedge fund. Sullivan & Cromwell, a prominent Wall Street law firm with about 900 lawyers, represented FTX on transactions and regulatory matters before its collapse last year. The firm secured court approval in January to advise FTX in its bankruptcy, overcoming objections from some FTX creditors and U.S. lawmakers that its past work created a conflict of interest.

An attorney who represents survivors of sexual abuse in the Archdiocese of New Orleans bankruptcy is asking a newly appointed federal judge to toss out rulings from U.S. District Judge Greg Guidry, who recused himself from the case last month amid questions about his ties to the Roman Catholic church, NOLA.com reported. Judge Guidry, who as a district court judge was tasked with hearing appeals related to the bankruptcy case, recused himself April 28 after the Associated Press reported that he had donated $50,000 to local Catholic charitable organizations. In court documents filed Monday, New Orleans attorney Richard Trahant asked Guidry’s successor in the case, U.S. District Judge Barry Ashe, to vacate two rulings by Guidry because of the circumstances surrounding his recusal.

Facing hundreds of lawsuits over sexual abuse claims, the Roman Catholic Bishop of Oakland, Calif., filed for bankruptcy on behalf of the diocese, saying he hopes to “stabilize” the church’s finances and provide “just compensation” for victims, the Los Angeles Times reported. “It is important we take responsibility for the damage done so we can all move beyond this moment and provide survivors with some measure of peace,” Bishop Michael C. Barber said of the chapter 11 bankruptcy. “Sadly, for many, the pain caused by these horrific sins, no matter when they occurred, will never wash away, which is why we offer support to survivors and pray for their continued healing.” The diocese was facing more than 330 lawsuits alleging childhood sexual abuse mostly from the 1960s, ’70s and ’80s by priests, Barber said. Other California-based dioceses also facing a wave of lawsuits have either filed or pondered filing bankruptcies in the past few months, including dioceses in Santa Rosa, Sacramento and San Diego.

Sam Bankman-Fried, the founder of collapsed cryptocurrency exchange FTX, has issued his first detailed legal defense since prosecutors accused him of fraud, seeking to dismiss several of the charges and claiming that the high-powered law firm representing FTX in its bankruptcy has been doing the government’s bidding, the New York Times reported. In court filings yesterday, lawyers for Bankman-Fried said FTX and its lawyers at Sullivan & Cromwell had become de facto agents of federal prosecutors building the criminal case against him and might be withholding crucial evidence. “FTX’s legal advisors went to the government to accuse Mr. Bankman-Fried behind his back without knowing the full facts, and ultimately forced him to step down as C.E.O.,” the lawyers wrote. For months, Sullivan & Cromwell has funneled documents and other evidence to the prosecution, the filings say. Mr. Bankman-Fried’s lawyers claimed that prosecutors had been seeking only the most incriminating documents, even though FTX might also be sitting on material that could help the defense. In effect, they argued, prosecutors have been “outsourcing” the legal requirement to provide potentially helpful material to the defense team, shifting that responsibility to a “private party” with no obligation to Mr. Bankman-Fried.

Before SVB Financial Group bondholders can collect the billions they are owed, the bankrupt company may have to file a claim with the Federal Deposit Insurance Corp. to recover $2 billion worth of deposits trapped by the receivership of Silicon Valley Bank, Bloomberg News reported. That’s because the cash can only be returned to the bank holding company through the receivership process set up after federal regulators seized Silicon Valley Bank, the FDIC argued in court papers on Wednesday. SVB Financial has been sparring with the agency over the $2 billion since filing for bankruptcy in March. The dispute has already bogged down the Chapter 11 case and threatens to pit the bankruptcy process against the receivership process the FDIC uses to repay creditors. “Although the FDIC approved additional funding under the systemic risk exception to protect SVB’s depositors, nothing that has transpired since March 10 altered the debtor-creditor relationship that exists” between the former parent company and the FDIC, lawyers representing the agency wrote in court papers filed on Wednesday.

Experts testifying at a Thursday hearing categorically blamed executive mismanagement for the recent spate of bank failures feared to be hurtling the economy into a recession, The Hill reported. At a Senate Banking Committee hearing, banking and regulatory experts from the University of Richmond School of Law, Catholic University and the U.S. Chamber of Commerce lobbying group all said bad management was the primary causes of the failures. “Those three banks had very unique business models,” Chamber of Commerce vice president Tom Quaadman testified. “Silicon Valley Bank concentrated on capital intensive tech startups as well as biomedical startups. First Republic Bank concentrated on wealth management, whereas Signature Bank had a large exposure to digital assets.” Regulatory lapses on the part of the Federal Reserve were also cited by the experts and by lawmakers of both parties. While the hearing was focused on “holding executives accountable after recent bank failures,” no bank executives were present at the Senate hearing, and no legal actions have been taken against any of them.