Silicon Valley Bank CEO Sells $3.5 Million Shares Just Before Bankruptcy

New York: Two top executives of a Silicon Valley bank dumped millions of dollars worth of stock on Friday, just two weeks before the company collapsed, a media report said. CEO Greg Baker offloaded more than $3.5 million of shares in a pre-planned, automated sell-off on February 27—which amounted to about 12,500 shares, according to a U.S. Securities and Exchange Commission filing—the New York Post reported.

On the same day, the bank’s third-in-command CFO Daniel Beck sold $575,180 in shares, Newsweek reported. The Silicon Valley bank, once a leading tech lender, was shut down by federal authorities after just 11 days. The New York Post reported that Baker & Beck sold its large stake in a legal corporate trading scheme set up by the SEC to thwart insider trading, so it’s unclear whether the CEO and CFO knew the company was just two weeks away. I will fall.

The firm was abruptly shut down on Friday by the California Department of Financial Protection and Innovation due to liquidity fears. SVB disclosed that it took a loss of $1.8 billion from the sale of $21 billion of its bond holdings. The New York Post reported that it faced a cash crunch due to rising interest rates and a recent downturn in the tech sector that caused many customers to reduce their deposits.

Shares of the bank’s parent company, SVB Financial, fell 60 per cent on Thursday. The stock was down 60 per cent in premarket trading on Friday until the halving. The New York Post reported that the sudden collapse has investors worried about a recessionary event similar to the 2008 financial crisis, although it is not yet clear what the full impact will be. Police were called to the Manhattan branch on Friday as depositors crowded into the building to withdraw money.