The separate investigations are in their preliminary phases and may not lead to charges or allegations of wrongdoing. Prosecutors and regulators often open investigations after financial institutions or public companies suffer big, unexpected losses.
As per people the investigations are also examining stock sales that SVB Financial’s officers made days before the bank failed. The Justice Department investigators involves the department’s fraud prosecutors in Washington and San Francisco.
JUST IN: 🇺🇸 SEC launches investigation into Silicon Valley Bank $SIVB executives stock sales made days before the collapse.— Watcher.Guru (@WatcherGuru) March 14, 2023
Before SVB failed last week and was taken over by the Federal Deposit Insurance Corp., it served mainly to the insular world of startups and the investors who fund them. Its deposits boomed alongside the tech industry, rising from 86% $189 billion in 2021.
Just two weeks before the collapse of SVB, its CEO Greg Becker sold $3.6 million of company stock, regulatory filings show. Ivestigations are in their preliminary phases and may not lead to charges or allegations of wrongdoing.
SVB's collapse came after major crypto friendly bank Silvergate said it was closing. And just days after SVB closed, New York regulators decided to shut Signature Bank, which also had many clients in the digital asset industry.
One of the major reason for the bank to fell victim last week to a run on deposits could be that the customers tried to withdraw $42 billion about a quarter of the bank’s total deposits on Thursday alone. The flood of withdrawals destroyed the bank’s finances. It had poured large amounts of deposits into U.S. Treasurys and other government sponsored debt securities whose market value declined as the Federal Reserve raised interest rates over the past year.
SVB was the 16th largest bank in the U.S., with some $209 billion in assets as of Dec. 31, according to the Federal Reserve. Its collapse is the second biggest bank failure in U.S. history.
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