One of the banks at the center of the financial crisis of March 2023 saw several insiders sell shares before the bank had a run on withdrawals and was taken over by regulators. The CEO of that bank left his home state fairly quickly.
What Happened: Silicon Valley Bank, a unit of SVB Financial Group SIVB, was closed on Friday March 10, 2023, by the California Department of Financial Protection and Innovation. The Federal Deposit Insurance Corporation (FDIC) was announced as the bank’s receiver.
The U.S. government announced a program to backstop the banks and protect depositors. Under the backstop, shareholders and bondholders of the bank could see their holdings go to $0.
One of the people impacted by the bailout is former Silicon Valley Bank CEO Gregory Becker. The former CEO lost his job with the bank and could be out of the value of the shares he owned in the company.
Becker had been the CEO of Silicon Valley Bank since 2011.
Benzinga previously reported that prior to the bank’s collapse, Becker sold 12,451 shares acquired through options. Becker paid $105.18 for the shares before selling them in a range of $285.79 to $288.55 on Feb. 27.
Becker netted a profit of $2,269,056 from the sale of $3,578,652 in shares. After the transaction, Becker owned 92,552 shares of SVB Financial Group in a revocable trust and 6,315 in a 401 (k)/ESOP.
Executives are allowed to exercise options and sell stock as they see fit, but the timing of the sale has caught the attention of the public. Some inside trades can be pre-scheduled and part of designated plans to sell shares at certain intervals.
The insider sales by executives are the subject of several investigations and could put Becker into the spotlight if he knew the bank was struggling with financing or how underwater it was on its bond holdings prior to the bank run and his stock sale.
Becker and others are also being sued by shareholders over whether they hid risks from the public.
Out of a job and the potential target of an investigation by the SEC and Department of Justice, Becker found a place to take a vacation — or hide out for the time being.
Related Link: The Big Picture: Why Silicon Valley Bank Collapsed, A Simple Explainer
On an Island: Becker and his wife Marilyn Bautista have left California and are currently residing in Maui, Hawaii, according to the New York Post.
The couple has a $3.1 million townhouse in the island city according to the report. Photos of the couple were shared by the Daily Mail showing their arrival and several stops in Hawaii.
Those who have lost money in shares of the bank or through bonds and investments wouldn’t likely be pleased seeing the details of the trip shared by the Daily Mail with a limo ride to the airport in San Francisco, first-class plane tickets and lush island living.
The home is located in a gated community according to the news stories.
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Photos: U.S. Department of Labor (public domain) via Wikimedia Commons; Hawaii, Shutterstock
Image and article originally from www.benzinga.com. Read the original article here.