Two of the top chiefs of a bank that collapsed on Friday – the biggest bank failure in the US in more than 10 years – dumped millions of dollars worth of stock just two weeks before the firm collapsed Friday, records show.
Silicon Valley Bank CEO Greg Becker offloaded over $5.3 million worth of stocks — which amounted to nearly 12,500 shares — in a pre-planned, automated sell-off on February 27, according to a US Securities and Exchange Commission filing, reported the New York Post.
That same day, the bank’s third-in-command CFO Daniel Beck sold $874,000 in stocks, Newsweek reported.
SVB, the once leading tech lender, was shut down by federal authorities just 11 days later.
It was the 18th largest bank in the US with a market capitalisation of around $40 billion, making it only around a fifth smaller than Australia’s ANZ Bank. It had total assets of more than $300bn.
Mr Becker and Mr Beck sold off their massive stakes in a legal corporate trading plan established by the SEC to thwart insider trading, so it is not clear whether the CEO and CFO knew the company would collapse in just two weeks.
There is no suggestion either executive did anything untoward.
SVB did not immediately respond to The Post’s request for comment.
The firm was abruptly shut down on Friday by the California Department of Financial Protection and Innovation due to liquidity fears.
SVB disclosed it had taken a $2.7 billion hit from a $32 billion fire sale of its bond holdings.
It faced a cash crunch due to surging interest rates and a recent meltdown in the tech sector led many customers to pare their deposits.
Shares of SVB Financial, the bank’s parent, had plunged by a whopping 60 per cent on Thursday. The stock was down by another 6 per cent in pre market trading on Friday until being halted.
The sudden collapse has investors worried about a recession event similar to the 2008 financial crisis, though it’s not yet clear what the full impact will be.
Police were called to a Manhattan branch in New York City on Friday as depositors swarmed the building in a bid to withdraw their money.
This story appeared in the New York Post and is reproduced with permission.
