Silicon Valley Bank CEO sold $3.5 million in shares just two weeks before collapse

Two of Silicon Valley Bank`s top officials dumped millions of dollars worth of stock just two weeks before the firm collapsed on Friday, an IANS report said.

CEO Greg Becker offloaded over $3.5 million worth of stocks - which amounted to nearly 12,500 shares - in a pre-planned, automated sell-off on February 27, according to a US Securities and Exchange Commission filing, the New York Post reported.

That same day, the bank`s third-in-command CFO Daniel Beck sold $575,180 in stocks, Newsweek reported.

Also Read: Silicon Valley Bank collapse leaves Indian startups worried – here’s why

Silicon Valley Bank, the once leading tech lender, was shut down by federal authorities just 11 days later.

Becker and Beck sold off their massive stakes in a legal corporate trading plan established by the SEC to thwart insider trading, so it is not clear whether the CEO and CFO knew the company would collapse in just two weeks, New York Post reported.

The firm was abruptly shut down Friday by the California Department of Financial Protection and Innovation due to liquidity fears.

Also Read: Silicon Valley Bank collapse is largest failure since 2008 crisis – what do we know so far

SVB disclosed it had taken a $1.8 billion hit from a $21 billion fire sale of its bond holdings.

It faced a cash crunch due to surging interest rates and a recent meltdown in the tech sector led many customers to pare their deposits, New York Post reported.

Shares of SVB Financial, the bank’s parent, had plunged by a whopping 60 per cent on Thursday. The stock was down by another 60 per cent in premarket trading Friday until being halted.

Also Watch: US Bank Stocks Crash: Panic At Silicon Valley Bank, 60% Value Lost, Watch To Know Triggers

The sudden collapse has investors worried about a recession event similar to the 2008 financial crisis, though it’s not yet clear what the full impact will be, New York Post reported.

Police were called to a Manhattan branch on Friday as depositors swarmed the building in a bid to withdraw money.

With IANS Inputs