The US Justice Department opened a probe into Silicon Valley Bank (SVB) amid its sudden collapse, according to a report Tuesday.
“The investigation is in its early stages and it is unclear just what federal prosecutors are focused on,” a source told the New York Times.
“One potential focus could be sales of company shares by several bank executives in the weeks before the bank’s failure, several legal experts said,” according to the report.
In less than one week of its sudden demise, the Federal Deposit Insurance Corporation (FDIC) took control of SVB’s and Signature Bank’s assets. That was followed by President Joe Biden assuring the nation that depositors’ money will be protected.
The Federal Reserve said Vice Chair Michael Barr will lead the review regulating SVB amid the sudden failure.
“We need to have humility, and conduct a careful and thorough review of how we supervised and regulated this firm, and what we should learn from this experience,” Barr said late Monday in a statement.
“The events surrounding Silicon Valley Bank demand a thorough, transparent, and swift review by the Federal Reserve,” said Chair Jerome Powell.