SVB execs sold millions of their company stock in lead up to collapse, federal disclosures show
CEO Greg Becker sold over $3.5 million in company stock, an SEC filing shows.
ByAli Dukakis
March 17, 2023, 9:27 PM
1:20
What you should know after the collapse of Silicon Valley Bank
Farnoosh Torabi, a financial expert and host o...Read More
Less than two weeks before Silicon Valley Bank became the largest bank failure since the 2008 financial crisis, top executives at the company sold stock totaling several million dollars, according to federal disclosures obtained by ABC News.
Former SVB President and CEO Greg Becker sold over $3.5 million of his company stock holdings on Feb. 27, according to a disclosure made to the U.S. Securities and Exchange Commission filed on March 1.
Becker wasn't the only member of SVB's top brass to sell company common stocks. In a separate FEC disclosure, also filed March 1, SVB Chief Financial Officer Daniel Beck sold $575,180 in company common stocks on Feb. 27.
ABC News reported this week that the Justice Department and Securities and Exchange Commission are probing the collapse of Silicon Valley Bank, according to two people familiar with the situation.
The probes, which are separate, are in the preliminary stages and it is not clear whether any wrongdoing has been committed. It is not unusual after a large public collapse of a bank or company for the Justice Department or SEC to step in and investigate.
PHOTO: Greg Becker, President and CEO of Silicon Valley Bank (SVB), speaks during the Milken Institute Global Conference in Beverly Hills, Calif., May 3, 2022.
Greg Becker, President and CEO of Silicon Valley Bank (SVB), speaks during the Milken Institute Global Conference in Beverly Hills, Calif., May 3, 2022.
Patrick T. Fallon/AFP via Getty Images, FILE
Sources are telling ABC News that part of the FBI's early focus will be looking into whether any of Silicon Valley's senior leadership got unusual bonuses or sold stocks in the days leading up to the bank's collapse. In short–is there any evidence of insider trading.
The U.S. Justice Department and SEC both declined ABC News' requests for comment.
In the days following Becker's sale of millions of dollars in his SVB shares and before the bank's collapse, the then-CEO appeared confident during remarks to an audience of investors, Wall Street analysts and technology executives attending a technology conference in San Francisco's Palace Hotel, according to a copy of his remarks obtained by ABC News.
One day after Becker's reported remarks, SVB announced a $1.8 billion loss on the sale of securities, including Treasury and mortgage bonds which had lost significant value over the previous year due to an aggressive series of interest rate hikes at the Federal Reserve. The bank laid out plans to raise more than $2 billion in an effort to shore up its balance sheet.
According to the New York Times, the week before Becker's confident projection at the tech conference – and then the bank's ultimate collapse – the rating agency Moody's had called to tell Becker "the banks bonds were in danger of being downgraded to junk." That would mean the call came around the same time Becker sold the over $3.5 million of his SVB common stock on Feb 27.
MORE: Silicon Valley Bank: How a digital bank run accelerated the collapse
Asked by ABC News to confirm the call, a spokesperson for Moody's declined to comment.
Becker did not respond to multiple requests from ABC News for comment. Silicon Valley Bank spokespeople directed queries from ABC News to the Federal Deposit Insurance Corporation.
In the bank's SEC annual report for the end of 2022, filed on Feb. 24, under "Credit Risks," the company wrote, "Because of the credit profile of our loan portfolio, our levels of nonperforming assets and charge-offs can be volatile. We have and may in the future need to make material provisions for credit losses in any period, which could reduce net income, increase net losses or otherwise adversely affect our financial condition in that period. Our loan portfolio has a credit profile different from that of most other banking companies. The credit profiles of our clients vary across our loan portfolio, based on the nature of our lending to different market segments.
MORE: Is this a banking crisis? What to know about the Silicon Valley Bank collapse
Another risk factor, the company disclosed, was that their "interest rate spread may further decline in the future. Any material reduction in our interest rate spread could have a material adverse effect on our business, results of operations or financial condition."
Under the subsection for "Legal, Compliance and Regulatory Risks," SVB said the same regulations now deemed to have been not strong enough were so cumbersome that they could risk business at the company.
"We are subject to extensive regulation that could limit or restrict our activities, impose financial requirements or limitations on the conduct of our business, or result in higher costs to us, and the stringency of the regulatory framework applicable to us may increase if, and as, our balance sheet continues to grow," SVB wrote in its annual filing.
"As a bank holding company with more than $100 billion of average total consolidated assets, we are subject to stringent regulations, including certain enhanced prudential standards applicable to large bank holding companies. If we exceed certain other thresholds, we will become subject to even more stringent regulations," it added.
March 10, 202310:27 Who is Greg Becker, the head of failed Silicon Valley Bank?
By Hannah Lang
Greg Becker, President and CEO at SVB speaks at the 2022 Milken Institute Global Conference in Beverly Hills, California, U.S., May 3, 2022. REUTERS/Mike Blake
March 10 (Reuters) - Greg Becker, the chief executive officer who presided over the collapsed Silicon Valley Bank, joined the company three decades ago as a loan officer.
The executive cut his teeth during the dotcom bubble and later steered the startup-focused lender in the wake of the 2008 global financial crisis. He became president and CEO of SVB Financial Group (SIVB.O) in 2011.
The company's operations abruptly came to a halt on Friday as California banking regulators moved quickly to shut it down in what became the largest bank failure since the financial crisis. Just 24 hours earlier, Becker had personally called clients to assure them their money with the bank was safe.
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The executive sent a video message to employees on Friday acknowledging the "incredibly difficult" 48 hours leading up to the bank's collapse.
"It's with an incredibly heavy heart that I'm here to deliver this message," he said in a video seen by Reuters. "I can't imagine what was going through your head and wondering, you know, about your job, your future."
Becker, who served on the board of directors at the Federal Reserve Bank of San Francisco, departed the board effective Friday, a spokesperson for the regional Fed bank said.
In January, Becker said the economic outlook was improving after a downbeat 2022.
“We're optimistic because our crystal ball is a little clearer," Becker told CNBC. While he expected public markets to stabilize, "we still think in the first half there is going to be more volatility."
Becker graduated from Indiana University with a bachelor's degree in business, according to Silicon Valley Bank's website. From there, he worked at a bank that served what he called "traditional companies." When his manager left to work for Silicon Valley Bank, Becker followed, he said in 2021 on a Bloomberg podcast.
Representatives for Silicon Valley Bank did not immediately respond to a request for comment.
The banker described his first few years at SVB as "the highest of highs and the lowest of lows" as the lender navigated the tech rout of the late 1990s.
"We took losses. It was a challenging time for us... I look back on it fondly. I learned a lot about the institution. I learned a lot about how to lend money," he said.
Before becoming president and CEO of SVB Financial Group, Becker co-founded SVB Capital, the company's investment arm. He also served as the chairman of the Silicon Valley Leadership Group from 2014 to 2017 and was a member of the U.S. Commerce Department's Digital Economy Board of Advisors from 2016 to 2017. Becker cycles in his free time and has five grown children.
Silicon Valley Bank's website calls Becker a "champion of the innovation economy." In a video for the BBC in December, Becker said his best career advice was for job seekers to build a skill-set around the innovation economy in fields like computer programming and project management.
"When you think about your opportunity, if you are under-represented (and have) those skills, it truly is endless," he said.