Silicon Valley Bank failure: Justice Department, SEC to launch investigations

By Phil Mattingly | CNN

The US Justice Department and Securities and Exchange Commission are opening investigations into the collapse of Silicon Valley Bank, according to sources familiar with the matter.

The federal investigations are in their preliminary stages, a source said, and are looking into both the bank’s failure and the actions by senior executives in the lead up to the decision by federal regulators to close the lender last week.

To this point no individuals have been accused of any wrongdoing and the person familiar with the matter noted that investigations into a significant event like the failure of Silicon Valley Bank are common.

SEC Chairman Gary Gensler, while declining to identify any specific institution, appeared to allude to the likely step in a statement on Sunday.

“Without speaking to any individual entity or person, we will investigate and bring enforcement actions if we find violations of the federal securities laws,” Gensler said in the statement.

The DOJ did not respond to CNN’s request for comment.

In an extraordinary action to restore confidence in America’s banking system, the Biden administration on Sunday guaranteed that customers of the failed Silicon Valley Bank will have access to all their money starting Monday. By guaranteeing all deposits — even the uninsured money that customers kept with the failed banks — the government aimed to prevent more bank runs and to help companies that deposited large sums with the banks to continue to make payroll and fund their operations.