DOJ, SEC investigate Silicon Valley bank collapse: Sources


The Justice Department and the Securities and Exchange Commission are investigating the collapse of the Silicon Valley bank, two people familiar with the situation said.

Separate investigations are in their preliminary stages and it is not clear whether any wrongdoing took place. After a massive bank or business failure, it is not uncommon for the Department of Justice or the SEC to step in and investigate.

Both the Justice Department and the SEC declined to comment. News of the research was first reported by The Wall Street Journal.

SEC Chairman Gary Gensler said in a statement Sunday that the agency is “focused on monitoring market stability and detecting and prosecuting any wrongdoing that puts investors at risk.” , capital formation or wider markets”.

“Without speaking to any entity or individual, we will conduct investigations and take enforcement action if we determine that federal securities laws have been violated,” he said.

Employees stand outside the closed headquarters of Silicon Valley Bank (SVB) on March 10, 2023 in Santa Clara, California. The Silicon Valley bank was shut down by California regulators on Friday morning and placed under the supervision of the US Federal Deposit Insurance Corporation. Before regulators closed, SVB shares were halted after falling more than 60% in premarket trading on Friday morning, after a 60% drop on Thursday as the bank sold $1.75 billion in shares to cover its U.S. Treasury portfolio and client declines. deposits.

Justin Sullivan/Getty Images

SVB CEO Greg Becker did not respond to ABC News’ request for comment.

Silicon Valley Bank, the nation’s 16th largest bank, filed for bankruptcy on Friday and was taken over by the Federal Deposit Insurance Corporation on Wednesday after the bank withdrew $42 billion in customer deposits by the end of Thursday. SVB has primarily served tech workers and startups, including some of Silicon Valley’s biggest names like Roku.

The Federal Reserve, the Treasury Department and the FDIC said Sunday that additional funding will be available to ensure that all insured and uninsured deposits are paid.

Also on Tuesday, shareholders sued Signature Bank and three of its former top executives, saying the New York-based bank was financially sound in the days before state regulators seized it. Signature Bank, the 29th largest bank in the United States, closed on Sunday, suggesting the financial panic had spread.

Signature Bank “misreported and failed to disclose” adverse events, according to the lawsuit.

“Specifically, Defendants made false and/or misleading statements and/or failed to disclose that: (1) Signature Bank did not have the strong grounds it represented in the days leading up to the acquisition of control or otherwise engaged in actions that exposed it to liability.” Acceptance of the New York Department of Financial Services; (2) as a result, it became the target of DFS’s regulatory actions, and (3) as a result, the defendants’ public statements were materially false and/or misleading at all times,” the lawsuit states.

The complaint was filed in federal court in Brooklyn on Monday by the Rosen Law Firm, which is suing the Silicon Valley bank. He is seeking unspecified damages.

All news on the site does not represent the views of the site, but we automatically submit this news and translate it using software technology on the site, rather than a human editor.

Leave A Reply