(RepublicanPress.org) – The controversy surrounding the recent collapse of Silicon Valley Bank continues to rage despite the Biden administration’s best efforts to reassure Americans the nation’s banking system is secure.
On March 10, Treasury Secretary Janet Yellen assembled leaders from the Federal Deposit Insurance Corporation (FDIC), the Federal Reserve, and the Office of the Comptroller of Currency (OCC) in the wake of SVB’s collapse. Two days later, the Treasury Department issued a press release announcing that the FDIC would “complete its resolution” of SVB in a way that “fully protects all depositors.”
The announcement confirmed that customers would have full access to their money starting on March 13. The statements also confirmed that taxpayer funds wouldn’t be used to bail out the failed bank. Instead, the FDIC would recover any losses to its fund by levying a “special assessment on banks, as required by law.”
President Joe Biden provided similar reassurances during a brief White House press conference later that day. He told reporters that his administration would:
- Protect all depositors’ money
- Use money from the fees banks pay into the Federal Deposit Fund instead of taxpayer dollars
- Fire the management team at the bank
- Refrain from protecting SVB investors, adding that “they knowingly took a risk”
- Get a “full accounting” of the circumstances surrounding the bank’s collapse
- “Reduce the risks” of a repeat of the collapse.
Likewise, Congressional lawmakers vowed to get to the bottom of the bank’s collapse, with many calling for a full investigation into the situation.
The DOJ and SEC Launch Investigations Into the Silicon Valley Bank Collapse
On March 14, Senator Majority Leader Chuck Schumer (D-NY) and Senator Elizabeth Warren (D-MA) sent a letter to Attorney General Merrick Garland and the US Securities and Exchange Commission (SEC) Chairman Gary Gensler, calling on them to launch a “comprehensive investigation” to determine whether SVB “executives and other key officials” met their legal responsibilities or otherwise violated civil or criminal statutes.
The letter called on the two executive branch offices to investigate several key issues, including, but not limited to:
- “Self-dealing” by banking officials may have involved bribes made to SVB’s venture capital and startup clients to neglect required risk management procedures
- The payment of oversized compensation packages and bonuses to SVB executives shortly before the bank’s collapse
- Recent stock sales by senior SVB executives, including CEO Gregory Becker’s $3.6 million sale of company shares in late February
Later in the day, The Wall Street Journal and other outlets reported that the DOJ and SEC had launched probes into SVB’s collapse, citing individuals with insider information. The Journal also reported that investigations into the collapse of failed financial institutions commonly happen after US regulators take control of a bank.
The expose didn’t offer any other details except to report that the separate probes were investigating recent stock sales by SVB executives and that federal prosecutors in Washington and San Francisco were leading the inquiry.
The Wall Street Journal reported that spokespersons for the SEC, DOJ, and San Francisco US Attorney’s Office declined to comment. Likewise, SVB’s CEO and CFO declined to respond to requests for information.
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