The list of companies and banks potentially affected by Friday’s collapse of Silicon Valley Bank is growing. But at least one person seems to have cashed in recently: chief executive Greg Becker, whose trust sold $3.6 million worth of shares on Feb. 27, according to SEC filings.
Silicon Valley Bank CEO should return millions in company stock he sold, lawmakers say
Becker is now coming under scrutiny, including from a personal acquaintance, Democratic California Rep. Ro Khanna, who said Sunday that Becker should give that money back.
“There should be a clawback of any of that money,” Khanna said in an interview with The Washington Post. “It should be going to the depositors.”
The sharp comments from Khanna, who represents the district where Silicon Valley Bank was headquartered, comes amid a furor in Washington over what the government’s role should be in bailing out the bank and making its customers whole.
Bailout talk roils Washington after Silicon Valley Bank’s collapse
Representatives of Silicon Valley Bank did not immediately return a request for comment.
Khanna offered a note of caution and said the sale may not indicate wrongdoing. “It’s important to understand before casting aspersions on someone’s motives whether it is a scheduled sale … which are done many months before,” he said. “We do need all the facts to come out before jumping to conclusions.”
Federal regulators have been working over the weekend on plans to help customers affected by the bank’s collapse, but have ruled out a bailout, according to Treasury Secretary Janet L. Yellen, who spoke on CBS’s “Face the Nation” on Sunday.
Shortly after the bank disclosed a $1.8 billion loss to shareholders that sparked a run, the Federal Deposit Insurance Corporation shut it down on Friday and took control of its deposits. Customer deposits of up to $250,000 are insured, and customers will have access to those funds by Monday morning, the regulator said.
But that coverage does not apply to the more than 90 percent of the bank’s customers — including titans of the technology industry — who have deposits above that limit.
The burning question for many now is whether an outside company will buy Silicon Valley Bank and make customers whole, or whether the U.S. government will step in and insure customer deposits above $250,000.
Without a buyer, Congress would probably need to pass legislation to draw on an insurance fund paid into by all banks and backed by U.S. taxpayers.
Critics warn that any support from the government could set a troubling precedent, leading other banks to expect federal authorities to intervene if they went under. It could also spark a populist backlash over the appearance of U.S. taxpayer money going to save some of the country’s richest residents.
For his part, Khanna said the federal government should make Silicon Valley Bank customers whole. Many of its customers, which range from companies that provide payroll to vineyards to climate start-ups, have not done anything wrong, he said earlier in the day, in comments on “Face the Nation.”
“They didn’t take risks,” he said. “They just had their money in a bank. And we’re saying those need to be guaranteed.”
Rep. Nancy Mace (R-S.C.) was among those on the other side, signaling on Sunday her opposition to a bailout in comments to CNN’s “State of the Union.”
“We cannot keep bailing out private companies because there’s no consequences to their actions,” she said. “People, when they make mistakes or break the law, have to be held accountable in this country.”