The CEO of Silicon Valley Bank sold $3.6 million in shares just before the bank collapsed: Was it accidental?

Just two weeks before the collapse of Silicon Valley Bank (SVB), Greg Becker, the bank's CEO, sold $3.6 million worth of shares.

According to Bloomberg, just two weeks before SVB stock fell 62% and was suspended from trading on March 10, 2023, Silicon Valley Bank chief executive Greg Becker sold 3 shares worth of shares. 6 million USD.

Specifically, he sold 12,451 shares on February 27. This is the first time in more than a year that Becker has sold shares of the parent company SVB Financial Group. In fact, he registered a plan to sell shares from January 26, 2023.

Neither Becker nor SVB immediately responded to questions regarding the $3.6 million sale of his stock and whether the CEO was aware of the bank's fundraising plan when he submitted the plan. translate or not.

Records show that the stock sale was made through a revocable trust controlled by Becker.

After a tumultuous week, on the morning of March 10, SVB stock was suspended from trading, and Silicon Valley Bank gave up efforts to raise capital or find a buyer.

At the same time, late yesterday, the United States Federal Deposit Insurance Corporation (FDIC) also immediately announced the closure and forfeiture of Silicon Valley assets.

The closure of the bank makes it the largest bank failure since the 2008 financial crisis and the second largest in history.

Is it accidental?

According to Bloomberg, there is nothing illegal in SVB's trading plans nor in Greg Becker's sale of shares. This type of trading was established by the US Securities and Exchange Commission (SEC) in 2000 to prevent the possibility of insider trading. However, some argue that such pre-arranged stock sale plans (known as 10b5-1 plans) have significant loopholes. Dan Taylor, a professor at the University of Pennsylvania's Wharton School, said: "Although Becker may not have foreseen the bank's collapse two weeks later on January 26, raising more capital is the plan. important. If they are discussing this at the exact time the plan to sell shares is approved, that is very problematic.” Last December, the SEC officially finalized a new rule that requires stock trading plans like Becker's to have at least 90 days of "cooling down", meaning business leaders cannot make new transactions during the day. within 3 months after the last transaction. However, from April 1, 2023, new business leaders must comply with this regulation.

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