U.S. prosecutors are investigating
the collapse of Silicon Valley Bank, according to a source familiar with the matter, as scrutiny mounts over the firm's sudden collapse and regulators scramble to contain the fallout.
The U.S. Justice Department is probing the sudden demise of the bank, which was shuttered on Friday following a bank run, the source said, declining to be named as the inquiry is not public. The Securities and Exchange Commission has launched a parallel investigation, according to the Wall Street Journal, which
first reported the probes.
Spokespeople for the SEC, SVB and the Justice Department
declined to comment.
The investigation is in early stages and may not result in allegations of wrongdoing or charges being filed, the source said. Officials are also examining stock sales by officers of SVB Financial Group , which owned the bank,
the WSJ reported , citing people familiar with the matter.
SEC Chair Gary Gensler on Sunday
said in a statement the agency is particularly focused on monitoring for market stability and identifying and prosecuting any form of misconduct that might threaten investors during periods of volatility.
The rapid demise of Silicon Valley Bank and the
fall of Signature Bank have left regulators racing to contain risks to the
rest of the sector . On Tuesday, ratings agency Moody's
cut its outlook on the U.S. banking system to "negative" from "stable."
SVB Financial Group and two top executives were sued this week by shareholders, who accused them of concealing how rising interest rates would leave its Silicon Valley Bank unit susceptible to a bank run.
<^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^ Bruised U.S. bank stocks shake off initial SVB contagion fears Record FDIC cash draw for SVB may affect debt ceiling 'X date' Signature Bank's closure had 'nothing to do with crypto'- New York regulator Apollo, Blackstone and KKR eye SVB loan book - Bloomberg News U.S. Justice Department, SEC investigating Silicon Valley Bank collapse - WSJ U.S. Senator Warren: Fed's Powell should recuse himself from bank review First Republic shares dive on contagion fear, dragging U.S. regional banks SVB a casualty in 'battle between fire and ice' against inflation, bankers hear ANALYSIS-Some U.S. banks facing stock rout may need to seek partners BREAKINGVIEWS-Bank woes make winners of money market villains BREAKINGVIEWS-Startup CEOs learn a lesson in counterparty risk BREAKINGVIEWS-Bank runs don’t change Fed’s focus on high prices BREAKINGVIEWS-European banks priced for profit dip, not crisis GRAPHIC-SVB, Signature Bank are first bank failures since 2020 GRAPHIC-The path to the fall of Silicon Valley Bank GRAPHIC-The Rise and Fall of SVB and Signature Bank ^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^> (Reporting by Chris Prentice in New York and Mehnaz Yasmin in Bengaluru; Editing by Krishna Chandra Eluri, Saumyadeb Chakrabarty and Nick Zieminski)
