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DOJ and SEC launch probes into Silicon Valley Bank after collapse

#DOJ #SEC #launch #probes #Silicon #Valley #Bank #collapse

WASHINGTON- THE justice department opened an investigation into the collapse of Silicon Valley Bank last weekthree sources familiar with the matter confirmed to NBC News on Tuesday.

The department’s investigation is in its early stages and part of it will look at whether bank executives sold shares before the collapse, two sources familiar with the matter said.

A team of FBI agents based out of the San Francisco bureau’s field office who specialize in white-collar crime are conducting the preliminary investigation, a senior law enforcement official told NBC News.

The Securities and Exchange Commission has also opened its own investigation, two sources said.

The investigations come days after the California Department of Financial Protection and Innovation resumed and closed Silicon Valley Bank to protect deposits, appointing Federal Deposit Insurance Corp. as receiver.

Silicon Valley Bank headquarters as shares sink
The headquarters of Silicon Valley Bank in Santa Clara, Calif., on Thursday.David Paul Morris/Bloomberg via Getty Images

The shutdown was the biggest bank failure since the 2008 financial crisis and the second biggest on record after Washington Mutual collapsed during this industry-wide collapse, according to the FDIC.

The Wall Street Journal first reported DOJ and SEC investigations, citing people familiar with the matter. The report also says investigations are in their early stages, adding that they may not lead to charges or allegations of wrongdoing.

The DOJ declined to comment. The SEC and Silicon Valley Bank did not immediately respond to NBC News’ requests for comment.

On Sunday, the Treasury Department, Federal Reserve and FDIC said the government would support Silicon Valley Bank deposits above the federally insured cap of $250,000.

President Joe Biden, meanwhile, sought to reassure the public on the situation on Monday after Signature Bank also failed.

“Thanks to my administration’s swift action over the past few days, Americans can have confidence in the safety of the banking system,” Biden said in brief remarks from the White House. “Your deposits will be there when you need them.”

Michael Kosnar contributed.


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