KPMG has agreed to a $224.5 million settlement in a class-action lawsuit brought by investors following the collapse of Silicon Valley Bank (SVB) in March 2023.
Norway’s sovereign wealth fund, Norges Bank Investment Management, and Swedish pension fund AP7, which jointly led the litigation, announced the settlement on 6 November 2026.
The agreement remains subject to court approval and does not constitute an admission of wrongdoing. Proceedings against other defendants continue.
What investors alleged
KPMG had audited Silicon Valley Bank since 1994, issuing unqualified audit opinions in the years preceding its collapse.
The bank failed on 10 March 2023, just 14 days after KPMG issued its final audit opinion.
Investors alleged that KPMG failed to respond adequately to warning signs concerning the bank’s liquidity, interest-rate exposure and ability to hold its securities investments to maturity.
SVB had accumulated a substantial portfolio of long-term securities whose market value declined as interest rates rose. Although the bank classified much of the portfolio as held to maturity, investors questioned whether it could realistically retain those investments without selling them to meet liquidity needs.
The allegations went beyond the bank’s eventual collapse. Investors argued that KPMG had access to information contradicting management’s representations but nevertheless issued unqualified audit opinions.
Internal audit documents strengthened the case
The litigation took a significant turn in August 2026, when a federal judge allowed investors to pursue additional securities-fraud allegations against KPMG.
The amended complaint incorporated approximately 300 new allegations informed by evidence obtained during discovery, including KPMG’s audit workpapers and internal communications.
According to the court’s ruling, investors alleged that KPMG had failed to meaningfully investigate whether SVB could hold its securities portfolio to maturity, despite evidence of mounting liquidity and interest-rate risks.
The court concluded that the allegations were sufficient to allow the additional fraud claim to proceed, rejecting KPMG’s motion to dismiss.
Earlier Senate investigation raised concerns
The settlement follows wider scrutiny of KPMG’s audits of three US regional banks that collapsed in 2023: Silicon Valley Bank, Signature Bank and First Republic Bank.
A September 2025 report by Democratic minority staff of the US Senate Permanent Subcommittee on Investigations examined KPMG’s audit work at all three institutions.
At Silicon Valley Bank, the report found that KPMG had completed a 64-condition going-concern checklist without identifying any warning indicators, despite the investigators identifying at least six conditions that were present.
The report also examined the removal of an interest-rate risk metric from the bank’s annual filing. That metric, known as Economic Value of Equity, indicated a $4.7 billion loss to equity. According to the investigation, KPMG reviewed drafts of the filing showing the deletion.
The findings raised broader questions about auditor independence, the commercial pressures associated with longstanding client relationships and the effectiveness of internal mechanisms for escalating serious concerns within professional-services firms.
KPMG disputed the Senate report’s conclusions and maintained that its audits complied with professional standards. The report itself did not determine whether KPMG had violated auditing standards.
KPMG denies wrongdoing
KPMG defended its work following the settlement announcement.
“We continue to stand by our audits of Silicon Valley Bank, and we are proud of our audit quality track record,” a KPMG US spokesperson told Reuters.
The firm described the agreement as a business decision rather than an admission of wrongdoing.
Norges Bank Investment Management chief executive Nicolai Tangen described the settlement as an important first step towards recovering investor losses.
The $224.5 million agreement covers the investor class, not just the Norwegian and Swedish funds.
The settlement brings KPMG closer to resolving its involvement in the shareholder litigation, but leaves a fundamental question unresolved: how effectively did the bank’s external auditor challenge management’s assumptions about risks that ultimately proved catastrophic?
The collapse of Silicon Valley Bank is one of numerous cases documented in the Global Big Four Scandal Timeline, which traces major audit failures, regulatory actions and litigation involving the world’s largest accounting firms.
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About the author: Claudine Cassar is the founder and editor of Big4News, covering audit, consulting, regulation and governance across Deloitte, PwC, EY and KPMG.
If I may, the settlement will help investors recover some losses, but it leaves a deeper question: can the institution replay what was known, how the risks were judged, who had authority, and what happened to the warnings?
That is where accountability begins: with a decision trail that can be examined while there is still time to act, and understood after the outcome.