Justice Dept. investigating Silicon Valley Bank collapse
March 14, 2023 Updated Tue., March 14, 2023 at 12:30 p.m.
The Justice Department has opened an investigation into the collapse of Silicon Valley Bank and the actions of its senior executives, according to a person familiar with the matter who spoke on the condition of anonymity to describe an investigation still in its early stages.
Financial regulators closed the bank, popular among tech firms and start-ups, last week after a run on deposits.
Late in February, as the bank’s downward trend intensified, a trust belonging to its chief executive Greg Becker sold $3.6 million in shares, according to Securities and Exchange Commission filings. Becker was among a chorus of financial institution executives who pressed Congress in 2018 to loosen financial regulations enacted after the 2008 Great Recession.
Justice Department representatives did not immediately respond to a request for comment.
SEC Chair Gary Gensler last week said his agency would be “particularly focused” on “identifying and prosecuting any form of misconduct that might threaten investors, capital formation, or the markets more broadly.”
President Biden on Monday said the Federal Deposit Insurance Corporation would backstop deposits held by SVB and Signature Bank, another failed institution that made large investments in cryptocurrency and digital assets.
That announcement appeared to soothe investors, who were rapidly fleeing the stocks of regional banks thought to have exposure to SVB and Signature. Shares were rebounding Tuesday.
Federal Reserve Chair Jerome H. Powell said his agency would conduct an inquiry into SVB’s failure.
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