The Justice Department and the Securities and Exchange Commission are investigating the collapse last week of Silicon Valley Bank, according to multiple reports.
The investigations were in their early stages on Tuesday, according to The Wall Street Journal and The New York Times. It was not immediately clear whether the probes would lead to any charges or allegations of wrongdoing. It’s not unusual for officials to launch investigations after financial institutions or public companies experience unexpected, sizable losses, according to the Journal.
Citing unidentified sources, the Journal reported that investigators are looking at stock sales made by officers of the bank’s parent company, SVB Financial, days before the bank failed. The company’s CEO, Greg Becker, and chief financial officer Daniel Beck sold shares of the company the week before the bank collapsed, according to the Journal and The Washington Post.
Becker sold $2.3 million worth of shares and Beck sold just over $575,000 worth of shares on Feb. 27, the Journal reported, citing securities filings. Silicon Valley Bank, which worked primarily with tech startups and venture capitalists, failed on March 10.
Officials did not immediately confirm the investigations. However, SEC Chairman Gary Gensler said in a statement issued Sunday that officials were monitoring market events.
“In times of increased volatility and uncertainty, we at the SEC are particularly focused on monitoring for market stability and identifying and prosecuting any form of misconduct that might threaten investors, capital formation, or the markets more broadly,” he said. “Without speaking to any individual entity or person, we will investigate and bring enforcement actions if we find violations of the federal securities laws.”
Regulators took control of Silicon Valley Bank on Friday after customers rushed to withdraw their funds following news that it had sold $21 billion of bonds at a $1.8 billion loss. Officials have said customers who deposited funds into Silicon Valley Bank and another recently failed financial institution, New York’s Signature Bank, will be protected and have access to their money.
/cloudfront-us-east-1.images.arcpublishing.com/cmg/XCUXZC2XYZHCRGNNGKFEX6U3LQ.png)
