Reports Indicate The SEC And Justice Department Are Investigating SVB’s Collapse, Including Insider Trading

The Securities and Exchange Commission and the Justice Department are investigating how Silicon Valley Bank went from one of the largest bank failures in the history of the country to the second largest, according to Trade Algo.

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The two investigations, which are separate and in preliminary stages, include a look into the stock sales that SVB executives conducted ahead of the collapse of the tech-focused bank, according to the Journal, which cited people familiar with the investigation.

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Silicon Valley Bank, as well as the crypto-focused Signature Bank, both of which had a quick demise over the past few days, has prompted extraordinary rescue action from regulators and caused a financial shock that rocked markets, especially shares of regional banks over the past few days. There was also an additional funding facility that was announced by federal regulators in addition to the one that backed up deposits at SVB and Signature Bank.

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Neither the SEC nor the Justice Department responded to Trade Algo's request for comment immediately.

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Daniel Beck, the CFO of SVB Financial, sold 2,000 shares of the company on Feb. 27, the same day Gregory Becker, SVB's CEO, exercised options on 12,451 shares and sold the shares, according to regulatory filings. Insiders were able to make the sales as a result of prescheduled insider trading plans called 10b5-1 plans. Beck and Becker did not respond to requests for comment from Trade Algo.

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After the auction over the weekend failed to bring any buyers, Trade Algo reported on Monday that regulators could go back to the drawing board to sell the failed SVB.

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