Two top officials of Silicon Valley Bank allegedly planned massive sell-offs of their stock in the bank in late January, weeks before the Federal Deposit Insurance Corporation took control of the bank at the behest of California state regulators.
According to the UK Daily Mail, CEO Greg Becker sold 12,451 shares at an average price of $287.42 on Feb. 27. That deal netted him $3.57 million. The deal to make the sale was set up on Jan. 26.
Daniel Beck, the bank’s chief financial officer, sold 2,000 shares at $287.59 per share on Feb. 27 as well, making $575,000. His plan to sell was set up on Jan. 24.
The Mail noted no allegations of impropriety have been made regarding those sales.
The bank’s collapse on Friday came as the end result of a long chain of events, according to The New York Times.
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Earlier this week, to cover the demands of depositors for their money, it began to sell off assets.
However, on Wednesday it announced this resulted in a $2 billion loss. Confidence cratered Thursday as depositors withdrew their money to the point where the bank could not cover all withdrawals.
Silicon Valley Bank’s main focus was funding technology startups, according to CNBC.
“The number one question is, ‘How do you make payroll in the next couple days?’ No one has the answer,” Ryan Gilbert, founder of venture firm Launchpad Capital, said.
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CNBC noted that the FDIC insures deposits of up to $250,000 per client. Because Silicon Valley Bank mostly focuses on businesses, CNBC said the FDIC’s protection has limited impact.
As of December, about 95 percent of the deposits at Silicon Valley Bank were not insured, according to Securities and Exchange filings obtained by CNBC.
The FDIC said in a release that Silicon Valley Bank customers whose money is insured can access their funds on Monday.
Uninsured depositors face a much murkier future.
“The FDIC will pay uninsured depositors an advance dividend within the next week….
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