Justice Department launches investigation into Silicon Valley Bank execs who cashed in millions in stock before collapse as first class action lawsuit is filed
- CEO Gregory Becker and CFO Daniel Beck were paid a combined $4 million
- Now, the DOJ is investigating those transactions along with the bank’s collapse.
- The first class action lawsuit has also been filed against the couple and the bank.
The Justice Department and the SEC will investigate the collapse of Silicon Valley Bank and the two executives who cashed in millions in stock before it was seized.
The ousted chief executive, Gregory Becker, and chief financial officer, Daniel Beck, sold their shares two weeks before panicked bank customers fled for their money.
Becker cashed in $3.57 million worth of shares in a pre-planned automatic liquidation, while Beck parted with $575,000.
The Wall Street Journal today cites law enforcement sources as saying those transactions will now be the subject of a fraud investigation.
The SEC is also investigating the bank for violations.
Greg Becker (left) sold 12,451 shares at an average price of $287.42 each on February 27. SVB CFO Daniel Beck (right) sold 2,000 shares at $287.59 each on the same day as his boss. The price plunged to just $39.49 before trading on Friday before the Federal Deposit Insurance Corporation (FDIC) seized its assets.
None of them have commented on the crisis at their bank, nor have they been seen since it collapsed.
The Justice Department investigation coincides with the first class action lawsuit to be filed against the bank, once a darling of the tech industry.
Yesterday, Chandra Vanipenta filed a lawsuit against SVB Financial Group, the bank’s parent company, and Becker and Beck.
They allege they were tricked into buying securities with the bank and accuse it of violating SEC code.
The lawsuit does not specify how much money was lost, but invites others to join.
It was filed yesterday in the US District Court for Northern California.
The DoJ has not yet issued any kind of statement related to the investigation.
Becker has been forced to leave his position on the Board of the Federal Reserve Bank of San Francisco.
Becker has been replaced at the bank by Tim Mayopoulos, who said yesterday that everything was business as usual despite the fact that the bank was seized.
President Biden has vowed to make depositors at the bank whole and blames the collapse, the worst of any US bank since 2008, on the Trump administration “relaxing restrictions” during his tenure.
Others, including SVB staff, say the bank’s failure is due to Becker’s ‘idiot’ leadership.