The US banking regulator is investigating possible misconduct by executives and others involved in the failures of Silicon Valley Bank and Signature Bank.
Federal Deposit Insurance Corporation President Martin Gruenberg said in testimony to Congress that the agency opened investigations into “directors, officers, professional service providers and other parties of banks affiliated with institutions for losses they caused to lenders and for their management misconduct”.
Gruenberg did not provide further details about who or what entity may be the subject of the investigations, which could be one of several ongoing by the US government.
Federal prosecutors and the Securities and Exchange Commission (SEC) are also investigating any possible executive wrongdoing in SVB’s sudden implosion earlier this month, two sources told Reuters.
One of the sources said that the people involved were in the process of hiring lawyers to represent them in government investigations.
It is common for the Government to open investigations into these types of events and these investigations do not necessarily lead to misconduct charges.
The bank, which was owned by SVB Financial Group before its closure a week and a half ago, was the victim of a social media-fueled bank run that led depositors to withdraw $42 billion in one day.
But its sudden collapse has also raised questions about what executives knew about the bank’s troubles and what they disclosed to investors, the sources said.
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