The American authorities have opened two investigations to clarify whether there was a loss of duties and suspicious maneuvers in the fall of Silicon Valley Bank (SVB).
As The Wall Street Journal advanced this Tuesday, the Department of Justice has opened a criminal investigation to clarify how the SVB, with assets valued at more than 200,000 million dollars, ran out of liquidity overnight. The market regulator, the SEC, has also launched an investigation, which need not lead to formal charges.
One of the points to be resolved is the sale of shares by the president and CEO of SVB at the time of the fall, Greg Becker, and the financial director, Daniel Beck, weeks before the collapse as part of a sales program prefixed.
Specifically, Becker exercised options on 12,451 shares on February 27 and sold them the same day for about $2.3 million, while Beck sold just over $575,000 worth of shares on February 27, about a third of their shares in the company.
Both sales were made under so-called 10b5-1 plans, which allow stock sales to be scheduled in advance to allay suspicions of insider trading and for which the SEC recently tightened the rules, including a 90-day waiting period. before the sales can be executed and which were effective on February 27, the same day the executives sold.
Although the sale had been planned for a month, the authorities are investigating to what extent the directors were aware of the situation that the group could face, with a strong investment in fixed income, in the event of having to part with the titles if a worsening occurred. of business conditions. This was what finally happened, with heavy losses, at which point depositors began to withdraw their money in the face of widespread mistrust.
In any case, the managers eventually suffered losses as well, because Becker had about $20 million in stock the day before the bank imploded.
Last Sunday, SEC Chairman Gary Gensler assured that the SEC “will investigate and take enforcement action if it finds violations of federal securities laws” in case “misconduct” is detected that could harm investors or the markets.
Senator Elizabeth Warren has also called for bankers to return their salaries and bonuses. As an example, Becker earned $9.9 million in 2022.
