SEC And DOJ Probe Insider Stock Sales at Silicon Valley Bank, Reports WSJ

According to The Wall Street Journal, investigators are looking into the stock sales made by Silicon Valley Bank Financial’s executives just days before the bank’s failure.

The recent report by The Wall Street Journal claims that the U.S. Justice Department and the U.S. Securities and Exchange Commission have launched an investigation into the failure of Silicon Valley Bank.

As part of these investigations, authorities are reportedly scrutinizing stock sales made by SVB’s executives in the days leading up to the bank’s collapse. 

The Journal also reported that the Justice Department has enlisted its fraud prosecutors based in Washington and San Francisco to assist with the investigation.

Details Of Silicon Valley Bank Investigation 

According to regulatory filings, just two weeks before Silicon Valley Bank’s collapse, its CEO Greg Becker sold $3.6 million worth of company stock. The timing of Becker’s sale has raised questions and drawn scrutiny from investigators, who now examine the stock sales made by SVB’s executives in the days leading up to the bank’s failure. 

The U.S. Justice Department and the U.S. Securities and Exchange Commission are conducting investigations into the collapse of SVB, with a particular focus on the stock sales made by SVB’s top brass. 

The Wall Street Journal reported that the Justice Department has brought in its fraud prosecutors in Washington and San Francisco to lead the probe. The investigations are still ongoing, and it’s unclear what their findings will be. 

However, the sale of the stock by SVB’s CEO just before the bank’s collapse has raised concerns about insider trading and conflicts of interest. This has left many investors and stakeholders of the bank feeling uneasy and uncertain about the future of the once-prominent Silicon Valley institution.

According to Tuesday’s report from The Wall Street Journal, people familiar with the matter have stated that the investigations into Silicon Valley Bank’s collapse by the U.S. Justice Department and the U.S. Securities and Exchange Commission are still in their preliminary phases. It is uncertain if these investigations will result in charges or allegations of wrongdoing. 

The report also noted that the Justice Department had involved its fraud prosecutors in Washington and San Francisco in investigating the matter. The investigations reportedly include examining the stock sales made by SVB’s executives before the bank’s collapse.

After reports of liquidity issues at Silicon Valley Bank (SVB), customers tried to withdraw $42 billion in a single day, leading to state regulators’ closure of the California-based bank. SVB’s collapse has drawn the attention of the U.S. Securities and Exchange Commission and the Justice Department, investigating stock sales made by the bank’s executives before its failure. The investigations are still in their early stages, and there has been no indication of wrongdoing or charges being filed.

SVB’s closure marks the second-largest banking failure in the history of the US finance industry, only surpassed by Washington Mutual’s collapse in 2008. 

The bank had a significant client base within the tech industry, which included a long list of cryptocurrency companies. Its sudden closure followed rumors of liquidity issues, leading to a run on the bank with customers attempting to withdraw a staggering $42 billion in a single day.