Wednesday 15 March 2023 - 08:42

US Continues to Investigate SVB Collapse

Story Code : 1046846
US Continues to Investigate SVB Collapse
An unnamed source familiar with the matter told the Wall Street Journal that the US “Justice Department” is probing last week’s sudden downfall of one of America’s oldest banks. 

At the same time the Securities and Exchange Commission launched a parallel investigation, the outlet learned.

The source noted that the probe is in early stages and may not result in charges being filed. According to several cited sources, stock sales by officers of SVB Financial Group that owned the bank are being examined. 

Earlier this week, the group and its two top executives were sued by shareholders. They accused the management of hiding information that rising rates were making SVB susceptible to a bank run.

SVB has become the second-largest bank failure in US history causing chaos in the banking sector and panic in the tech industry. It was followed by the fall of Signature bank and prompted Washington to introduce emergency measures to contain the fallout. 

Earlier on Tuesday, ratings agency Moody's changed its outlook on the US banking system from “stable”’ to “negative.”