The U.S. Justice Department (DOJ) and the Securities and Exchange Commission (SEC) have opened separate investigations into last week's failure of Silicon Valley Bank, sources told the WSJ and AP.
The probes, which are now in the early stages, will include examinations of actions taken by the bank's top executives, including whether stock sales made days before the bank's collapse violated trading rules.
- The agencies will investigate stock sales undertaken by executives, including CEO Greg Becker and CFO Daniel Beck, at the bank's parent company, SVB Financial.
- According to a securities filing, Becker on Feb. 27 exercised options on 12,451 shares and sold them the same day, netting about $3M.
- Beck sold $575,000 worth of shares, about a third of his holdings, also on Feb. 27.
- Reports noted that the bank and its executives have not been accused of wrongdoing and the probes may not result in formal charges.
- A source said DOJ's fraud section is working on the probe alongside federal prosecutors from the U.S. Attorney’s Office for the Northern District of California.
- Earlier this week, the Federal Deposit Insurance Corp., the Treasury Department, and the Federal Reserve guaranteed all deposits at the California bank, which collapsed last Friday.
- The bank's clients, including tech startups and their investors, attempted to withdraw nearly $42B from the bank last week, driving it to insolvency.
