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New York, March 12 – Two of Silicon Valley Bank’s top officials dumped millions of dollars worth of stock just two weeks before the firm collapsed on Friday, according to a media report.
CEO Greg Becker offloaded over $3.5 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, the New York Post reported.
That same day, the bank’s third-in-command CFO Daniel Beck sold $575,180 in stocks, Newsweek reported.
Silicon Valley Bank, the once leading tech lender, was shut down by federal authorities just 11 days later.
Becker and 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, New York Post reported.
The firm was abruptly shut down Friday by the California Department of Financial Protection and Innovation due to liquidity fears.
SVB disclosed it had taken a $1.8 billion hit from a $21 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, New York Post reported.
Shares of SVB Financial, the bank’s parent, had plunged by a whopping 60% on Thursday. The stock was down by another 60% in premarket trading 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, New York Post reported.
Police were called to a Manhattan branch on Friday as depositors swarmed the building in a bid to withdraw money.