DOJ and SEC to investigate SVB crash and insider stock sales: Report

By: Henry Felix

DOJ and SEC to investigate SVB crash and insider stock sales: Report

March 15, 2023 5:59 AM

There will be two independent probes into the reasons for Silicon Valley Bank's demise and the stock sales made by management just before the bank went down.

The US Justice Department and the Securities and Exchange Commission are apparently investigating the sudden demise of Silicon Valley Bank, which was shut down by regulators last week during an unprecedented bank run.

As reported by The Wall Street Journal on March 14 (citing "people familiar with the subject"), the investigations will focus on the circumstances leading up to the bank's failure and the stock sales made by SVB finance officers in the months before the bank's demise.

According to securities filings, the bank's CEO, Greg Becker, and chief financial officer, Daniel Beck, sold shares two weeks before the bank's demise, causing several observers to express displeasure.

On February 27th, both Becker and Beck sold stocks totaling $3.6 million and $575,180, respectively, as reported by Newsweek. CNBC revealed that over the past two years, SVB executives and directors cashed out a total of $84 million worth of stock.

The investigations, however, are in their early stages and may not result in charges or allegations of wrongdoing, according to the sources.

According to another source with intimate knowledge of the matter, a formal announcement from the Justice Department is planned in the coming days, according to NPR.


Barely two days after Silicon Valley Bank went bankrupt, SEC Chairman Gary Gensler issued a stern warning that the regulator will be on the watch for violations of US securities rules.

According to Gensler, "we will investigate and launch enforcement proceedings without speaking to any individual company or person if federal securities laws are broken."

The Federal Reserve Bank of the United States is also investigating the bank's demise in its own way, specifically how it oversaw and controlled the now-defunct financial organization.

Likewise, SVB Financial Group and two executives were reportedly sued on March 13 by shareholders for failing to disclose how rising interest rates would make the bank "especially vulnerable" to a bank run.

The complaint seeks damages from June 16, 2021 through March 10, 2023 for SVB investors.