As RedState’s Joe Cunningham reported, Silicon Valley Bank (SVB) was taken over and shut down by federal regulators Friday in one of the biggest financial failures in history, and the largest since the Global Financial Crisis of 2008. The bank’s collapse sent stocks tumbling and ignited worries about “contagion”—in other words, more bank failures.
Multiple reports describe people lining up outside SVB branches hoping to get their money out; the NYPD was even dispatched in New York City to calm things down.
But now the plot thickens, as Fortune reports:
Silicon Valley Bank Chief Executive Officer Greg Becker sold $3.6 million of company stock under a trading plan less than two weeks before the firm disclosed extensive losses that led to its failure.
The sale of 12,451 shares on Feb. 27 was the first time in more than a year that Becker had sold shares in parent company SVB Financial Group, according to regulatory filings. He filed the plan that allowed him to sell the shares on Jan. 26.
Greg Becker, The Silicon Valley bank CEO, sold over $3.5M of $SIVB stock in the past two weeks ? pic.twitter.com/o7xNjAVa8c
— Crypto Crib (@Crypto_Crib_) March 10, 2023
Looks like Becker knew something was afoot.
The sales were not illegal, and as noted he planned them back in January. Nevertheless, it sure looks like he knew the writing was on the wall. SVB’s downfall was swift, as the Wall Street Journal reported:
Once a darling of the banking business, Silicon Valley Bank collapsed at warp speed after it announced a big loss on its bondholdings and plans to shore up its balance sheet, tanking its stock and sparking widespread customer withdrawals.
HOW did Silicon Valley Bank $SIVB collapse overnight? A bank run led to $42 BILLION in withdrawal requests yesterday in a single session, leaving the bank with a balance of – $958 million at the close. pic.twitter.com/i5NYIvWlKk
— Stock Talk Weekly (@stocktalkweekly) March 10, 2023
But there’s more: a Reuters report emerged Friday that Becker was no longer on the board of directors at the Federal Reserve Bank of San Francisco, and there has yet to be a full explanation.
Becker’s departure was effective on Friday, a spokesperson for the Federal Reserve said. Earlier on Friday, Silicon Valley Bank was closed by regulators.
The [Federal Reserve’s] spokesperson declined to say how Becker exited the San Francisco Fed board. Becker served as a Class A director at the San Francisco Fed, one of three finance executives representing member banks in the San Francisco Fed district.
https://t.co/A4CglgwUOL MASSIVE Line Forms Outside of San Francisco Silicon Valley Bank Branch as Bank Folds (VIDEO): The post MASSIVE Line Forms Outside of San Francisco Silicon Valley Bank Branch as Bank Folds (VIDEO) appeared first on The Gateway… https://t.co/A4CglgwUOL pic.twitter.com/PSoxESFVoD
— America First Newswire™ (@Amfirstnewswire) March 11, 2023
The federal banking system is complex, but here’s a short rundown:
The 12 regional Federal Reserve banks are quasi-private institutions overseen by the Fed in Washington. Their respective boards watch over the banks directly and provide advice on governance as well as local economic intelligence.
Presumably, they no longer wanted Becker’s advice, since his own bank just failed spectacularly. He had previously enjoyed a long, successful run with the institution:
Becker, Silicon Valley Bank’s chief executive officer, joined the company three decades ago as a loan officer. He played a prominent role in steering the lender, valued at over $40 billion till last year, through the 2008 global financial crisis and was appointed the president and CEO of SVB Financial Group in 2011. The bank served mostly technology workers and venture capital-backed companies.
Are we looking at another Sam Bankman-Fried/FTX situation here, where SBF (appears to have) knowingly defrauded investors? Or is Becker just the victim of bad luck and a confusing economy? Let’s just say, he’s looking mighty suspicious right now.
Time will tell, and we’ll keep you updated as the story unfolds.
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