One of the banks at the centre 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 the bank left his home state fairly quickly.
What Happened to 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 protect depositors and backstop banks. Under the backstop, shareholders and bondholders of the bank could see their holdings go to $0.
One of the people affected by the bailout is former Silicon Valley Bank CEO Gregory Becker. The former CEO lost his job with the bank, so he could lose the value of the shares he owned in the company.
Becker had been CEO of Silicon Valley Bank since 2011.
Before the bank collapse, Becker sold 12,451 shares through options, according to Benzinga. Becker paid $105.18 for the shares before selling them in a range of $285.79 to $288.55 on February 27.
Becker made a profit of $2,269, 056 from the sale of $3,578, 652 shares. Becker owned 92,552 shares of SVB Financial Group in a revocable trust and 6,315 in a 401k ESOP after the transaction.
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 a plan to sell shares at certain intervals.
The bank is struggling with financing or how underwater it was on its bond holdings prior to the bank run and his stock sale, and the insider sales by executives could be the subject of several investigations and could put Becker in the spotlight.
Becker and others are being sued by shareholders over whether they hide risks from the public.
Becker found a place to take a vacation or hide out for the time despite being out of a job and the potential target of an investigation by the SEC and Department of Justice.
On an island: Becker and his wife Marilyn Bautista left California and are currently living 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 be pleased with 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.
According to the news stories, the home is located in a gated community.
Photos : U.S. Department of Labor public domain via Wikimedia Commons; Hawaii, Shutterstock