(AmericanProsperity.com) – According to a Wall Street Journal Tuesday report, the Securities and Exchange Commission (SEC) and the Department of Justice (DOJ) decided to open an investigation into the collapse of the Silicon Valley Bank. Both agencies are currently leading separate investigations into the tech lender’s failure that are in their preliminary stage, and won’t necessarily lead to criminal charges.
This situation comes after the California Department of Financial Protection and Innovation shut down the SVB last Friday, following a significant stock crash of over 60 percent in premarket trading, caused by fears of a banking industry crisis that led to massive clients’ withdrawals. The SVB mostly served high-risk startups that were affected by the higher interest rates that the Federal Reserve decided to impose in order to contain inflation. While the tech lender wasn’t too famous, it was among the top 20 banks in the United States, with $209 billion in total assets and $175 billion in total deposits in 2022.
As reported by The Wall Street Journal, these types of probes usually investigate the role that the banks’ executives played in the months or weeks before their final collapse, to determine whether they committed any type of wrongdoing. Investigators could determine whether the tech lender managed to properly characterize its financial health and risk to the investors before the debacle.
The decision by the SEC and DOJ comes after media outlets revealed that SVB’s CFO Daniel Beck and Financial Chief Executive Greg Becker sold numerous quantities of shares a week before the tech lender collapsed. Apparently, Beck sold nearly one-third of his shares for $575,000 on February 27th. Becker sold 12,451 shares for about $2.3 million that same day.
In a Tuesday letter sent to Becker, Democratic Massachusetts Senator Elizabeth Warren asked Becker about his attempts to reverse the banking protections established in the Dodd-Frank Wall Street Reform Act.
Copyright 2023, AmericanProsperity.com
