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.
U.S. banking regulators on Friday assumed control of Silicon Valley Bank, the country’s 16th largest bank and a top financial institution for technology and life sciences companies.
This is the largest bank failure since Washington Mutual in 2008.
Federal Deposit Insurance Corp. (FDIC) created a new bank into which all of SVB’s deposits were transferred, and said that “all insured depositors will have full access to their insured deposits no later than Monday morning,”
One big caveat is that deposits only are insured to up to $250,000, so FDIC added that it “will pay uninsured depositors an advance dividend within the next week.”
FDIC added that all of SVB’s physical bank branches will reopen on Monday morning.
SVB had approximately $209 billion of total assets and $175 billion in deposits at year-end 2022, but the FDIC says its current deposit total is “undetermined.”
SVB thus far has not quantified how much money walked out the door yesterday, after a $2.25 billion share sale plan sparked a run on the bank.
A seemingly endless number of second-order effects, including other banks may lend more cautiously, including SVB rivals that currently are swimming in new deposits.
The Fed could become more reluctant to keep pushing interest rates higher. On Friday, the market-priced odds decreased that the central bank will enact a super-sized half-point rate increase (although that also could be a reaction to the February jobs report).
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Source: Vietnam Insider