Silicon Valley Bank collapse: CEO cashed out millions while employees got bonuses
Silicon Valley Bank CEO Greg Becker cashed out stock options and options during the weeks leading to Friday’s crashAccording to public filings, this netted him a profit of $2.27million.
California closed down SVB Friday, two days after its 16th largest federally-insured bank, announced that it needed more than $2.2B to remain solvent. This sent the stock price of SVB plummeting over 60% in just 48 hours. The Federal Deposit Insurance Corporation The bank was placed in receivership and is now being called the worst U.S. bank collapse since the Great Recession of 2007-2009.
According to Securities and Exchange Commission filings Becker exercised stock options and sold them immediately on February 27 under a prearranged executive stock sales plan. As part of the plan, he had already filed sales on Jan. 26. He also sold stock for $1.1 million on Jan. 31, though the SEC filing for the sale stated that it was done to pay a tax liability.
The news of Becker’s recent profits is coming amid multiple reports that the bank which serves mostly technology workers and venture capital-backed businesses, paid bonuses to employees only hours before Friday’s FDIC takeover. Multiple sources Telled Axios For work in 2022, the bonuses were previously set to be disbursed Friday. The payment of bonuses for employees who work abroad was scheduled for this month but has yet to occur.
SVB reached financial stardom in the COVID-19 crisis because of major cash deposits by booming firms that increased its deposits from $60 Billion in the first quarter 2020 to over $200 Billion in December 2022. Wall Street Journal reported. Its securities portfolio grew from $27 billion in the 2020 first quarter to $127 billion by 2021’s end.
The fact that most of SVB’s assets were seemingly secure — they were mainly longer-term government bonds — led many investors to feel the bank was secure. T
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