Warren Urges for a Probe Into Former SVB CEO’s Insider Trades
Senator Elizabeth Warren told Yahoo Finance that Mr. Greg Becker, the former CEO of the failed Silicon Valley Bank (SIVBQ:US), should be investigated for insider trading.
Mr. Becker testified in front of Congress on Tuesday. He defended his pay and blamed the bank’s failure on the “unprecedented events”.
“There were a series of…unprecedented events that occurred led us to where we are today,” he said.
The former CEO also said he didn’t have any sensitive non-public information when he sold the stock in February. Congress members also grilled him about the $1.5 million bonus he received from the bank, which he said was approved by the bank’s board of directors.
“I know they believed it was fair and I believe they were accurate,” he said.
Commenting on the hearing, Sen. Warren said that Mr. Becker and his team “blew a bank up” by taking on too much risk.
“There is enough that was said in this hearing today that there needs to be a full investigation,” Senator Warren told Yahoo Finance.
She added that SVB’s management was too much focused on near-term profits and ignored the other risks that were associated with this strategy.
Sen. Warren also urged Congress to “put a stop” to the habit of management profiting from selling shares and then keeping “all that money” once the bank fails.
Along these lines, Senator Warren and her colleagues Catherine Cortez Masto, Josh Hawley, and Mike Braun have proposed a piece of legislation that would enable the Federal Deposit Insurance Corporation (FDIC) to recoup all or part of the compensation received by bank executives if a bank in question collapses.
Sen. Warren added that she is confident the bill can get the green light in the Senate in short order.
Congressman Ro Khanna was actively selling SVB shares in the fall of 2022.
“I have good partners in this. We've got a lot of Democrats committed on this, but we also have a good group of Republicans. We haven't gotten everybody signed on the dotted line...but I feel very optimistic that we're going to have a good group of people.”
