Bank Execs' Stock Sales Under Investigation

Feds open probes after collapse of Silicon Valley Bank
By John Johnson,  Newser Staff
Posted Mar 14, 2023 3:11 PM CDT
Bank Execs' Stock Sales Under Investigation
Igor Fayermark, right, from the Federal Deposit Insurance Corporation, exits Silicon Valley Bank's headquarters in Santa Clara, Calif., on Monday, March 13, 2023.   (AP Photo/Benjamin Fanjoy)

Federal investigators have opened formal investigations into the collapse of Silicon Valley Bank—as well as lucrative stock sales by bank executives shortly before things went south. The Wall Street Journal first reported the investigations by the Justice Department and the SEC, and the newspaper notes that such inquiries are normal in such cases. It's possible no charges or even allegations of wrongdoing will surface. But the Journal and the New York Times say investigators will be looking at the sale of company shares before the bank collapsed by execs including CEO Gregory Becker and CFO Daniel Beck.

Both sold shares on Feb. 27, with Becker netting $2.3 million and Beck selling about $575,000 worth of shares, per the Journal. Both did so by the book, scheduling the sales 30 days in advance under a rule designed to bar profiting from inside information, both stories note. A new rule that requires a 90-day window instead of 30 went into effect the day of the stock sales, per the Journal. At The Street, Luc Olinga weighs in on Becker's sale in particular.

"On a legal level, there is no problem a priori," he writes. "But in terms of optics, it does not look good, and Greg Becker will have a hard time finding support." Olinga appears to be on the mark about that. The Washington Post reports that Democratic Rep. Ro Khanna, in whose district SVB is headquartered, already is calling for Becker to return the money. "There should be a clawback of any of that money," Khanna tells the newspaper. "It should be going to the depositors." (More Silicon Valley Bank stories.)

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