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U.S. banking regulator has begun misconduct probes in Signature, SVB failures
Published Mar 27, 2023 04:22PM ET
Updated Mar 27, 2023 04:53PM ET
© Reuters. FILE PHOTO: Signs explaining Federal Deposit Insurance Corporation (FDIC) and other banking policies are shown on the counter of a bank in Westminster, Colorado November 3, 2009. REUTERS/Rick Wilking/File Photo
By Chris Prentice and Pete Schroeder
WASHINGTON (Reuters) - A U.S. banking regulator is investigating potential misconduct on the part of executives and others involved in the failures of Silicon Valley Bank and Signature Bank (NASDAQ:SBNY).
Federal Deposit Insurance Corporation Chairman Martin Gruenberg said in prepared testimony to Congress that the agency had begun investigations into "directors, officers, professional service providers and other institution-affiliated parties of the banks for the losses they caused to the banks and for their misconduct in the management of the banks."
Gruenberg did not offer further details into who or what may be the subject of probes, which could be one of several under way by the U.S. government. Federal prosecutors and the Securities and Exchange Commission (SEC) are also looking into any potential wrongdoing by executives in SVB's sudden implosion earlier this month, two sources have told Reuters, with one noting that individuals were in the process of hiring lawyers to represent them amid the government investigations. It is common for the government to open probes into such events, and such investigations do not necessarily result in charges of misconduct. The bank, which was owned by SVB Financial Group prior to its shuttering a week and a half ago, was the victim of a social media-fueled bank run that saw depositors withdraw $42 billion in a single day. But its sudden collapse has also raised questions about what executives knew about the bank's struggles and what they disclosed with investors, the sources said.
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