The chief executive of Silicon Valley Bank, Greg Becker, has been facing scrutiny in the wake of the stock collapse of SVB Financial Group, his company of three decades. The Federal Deposit Insurance Corporation (FDIC) took control of the lender, with Becker having sold stock and options for a net gain of $2.27 million in the weeks before the crisis.
The collapse of SVB-SIVB –60.41% Financial Group stock and the closure of its Silicon Valley Bank unit by regulators was roughly two weeks before Greg Becker was appointed the group's president and CEO in 2011. He had also co-founded SVB Capital to manage venture capital investments and later served as chairman of the SVB Financial Group Board of Directors.
The collapse of SVB has been a blow to the tech industry, as Silicon Valley Bank served as a linchpin of financing for the sector. In the wake of the FDIC's takeover, Greg Becker sent a video message to employees, acknowledging the “incredibly difficult” 48 hours the company went through. He also advised clients of SVB-owned Silicon Valley Bank to “stay calm” amid the concerns of a liquidity crisis.
Becker's trading plan has been under scrutiny, as he sold $3.6 million of company stock less than two weeks before the collapse. His stock sale is being investigated by the U.S. Securities and Exchange Commission as part of the larger investigation into the company's failure.
SVB Financial Group has been beset by losses in recent months, with $4.4 billion of its $6.3 billion in assets being classified as troubled. The company reported a net loss of $1.5 billion in the first quarter of 2021, leading to speculation of its financial instability.
The FDIC is now in control of SVB, with the agency having taken a $3.2 billion loss in the takeover. Becker has stepped down from his position as chairman of the board, with the company's new chief executive also having replaced him. The company's new CEO is focusing on rebuilding the bank's operations, with the goal of returning its operations to profitability.
The SEC is continuing its investigation into Becker's trading plan, with the agency looking into whether he engaged in insider trading or other securities violations. The SEC is also investigating the larger collapse of SVB Financial Group and the role of its former CEO.
Becker's journey at SVB may have come to an end, but the investigation into the company's collapse is ongoing. The effects of the FDIC's takeover, the SEC's investigation, and the company's failure may be felt for years to come.
