Silicon Valley bank collapse triggers DOJ and SEC investigations
The Silicon Valley Bank (SVB) collapse has triggered two federal investigations, one by the Department of Justice (DOJ) and the other by the Securities and Exchange Commission (SEC), according to a the wall street journal report.
THE the wall street journal reported On Tuesday, “people familiar with the matter” said the DOJ and SEC were conducting separate investigations following the bank’s collapse, noting that it is common for authorities “to initiate investigations after financial institutions or public companies suffer large, unexpected losses.
According to Log.
Last week, the institution suffered a “massive ban race” after depositors “withdrew $42 billion, leaving the bank with a negative cash balance of $958 million,” forcing the bank into Federal Deposit Insurance Corporation receivership (FDIC).
A worker (center) tells people that the headquarters of Silicon Valley Bank (SVB) is closed on March 10, 2023 in Santa Clara, California. (Justin Sullivan/Getty Images)
The Associated Press noted SVB was once the 16th largest bank in the United States and a major financial center for the technology sector. Its slide into insolvency was the second-largest bank failure in American history.
THE Log The noted investigations are in their “preliminary stages and may not lead to charges or allegations of wrongdoing”.
The FDIC said in a statement “All insured depositors will have full access to their insured deposits by Monday morning.” However, uninsured depositors, those whose accounts held funds in excess of the $250,000 coverage cap, “would receive a certificate of receivership for the remaining amount of their uninsured funds.”
The statement noted that at the end of 2022, the bank held $175.4 billion in customer deposits, but “the amount of deposits in excess of insurance limits was undetermined” at the time of the bank’s closure.
Uncertainty about when and if companies will be able to access uninsured funds has impacted the tech ecosystem and the wider economy.
A March 12 statement from SEC Chairman Gary Gensler said:
In times of heightened volatility and uncertainty, we at the SEC are particularly focused on monitoring market stability and identifying and prosecuting any form of misconduct that could threaten investors, the formation of capital or markets more broadly. Without speaking to any entity or individual person, we will investigate and take enforcement action if we find violations of federal securities laws.
Federal Reserve Chairman Jerome Powell announcement On Monday, the central bank will continue a “thorough, transparent, and expeditious review” of the San Francisco Federal Reserve’s oversight of the SVB.
You can follow Michael Foster on Twitter at @realmfoster.
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