Justice Department opens probe into Silicon Valley Bank

Old_Joe

Excerpts from a current NPR report:

The Justice Department has launched a inquiry into the sudden collapse of Silicon Valley Bank, according to a person with direct knowledge of the investigation.

Federal prosecutors are starting to ramp up a probe into the doomed Silicon Valley Bank just days after a bank run led to its swift collapse. In response, the the Biden administration took extraordinary measures to shore up billions of dollars in deposits to contain contagion from spreading across the banking sector.

While the exact nature of the investigation remains unclear, a source familiar said a formal announcement from the Justice Department is expected in the coming days.

According to former federal prosecutors, one area that may intrigue Justice lawyers involves shares sold by top company executives before the bank imploded.

Silicon Valley Bank CEO Greg Becker sold $3.6 million of company stock two weeks before the bank reported massive losses in the run up to the bank's implosion, according to regulatory filings.

"A top company executive engaging in a significant financial transaction so close to a cataclysmic event makes sense as something that would be interesting to prosecutors," said Tamarra Matthews Johnson, a former Justice Department lawyer who is now in private practice.

The sale has triggered new scrutiny of Becker and prompted some politicians to call for him to give the money back.

Becker has not been accused of any wrongdoing in connection with the stock sale. Becker did not return NPR's request for comment.

The Wall Street Journal earlier reported news of the Justice Department investigation.

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LewisBraham

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