This riveting CLE course reviews the well-publicized failure of the high-flying Silicon Valley Bank. This bank ran out of money as a result of a quick, massive run on the bank—depositors sought their money back—immediately after the public disclosure of serious financial problems.

The demise of this Bank—with $209 billion in assets, its failure was the second biggest in U.S. history—received immediate widespread analysis and attention, much of which has been focused on the quality of the supervision of the Bank and its holding company by both federal and state regulators, as well as the management performance by senior executive leadership.

Little or no attention has been paid to the role of independent, or outside (non-management) directors. Outside directors, not being officers, are not responsible for managing the day-to-day operations of the company. They are, instead, in an oversight role. Broadly, they are responsible for establishing policies for the operation of the company and for monitoring the operation of the company by its management.

This program focuses on what potentially dangerous conditions—“red flags”—the outside directors were made aware of and when, so as to enable preliminary observations on their potential liability as directors under federal and state law.