Silicon Valley Bank’s collapse continues to send shockwaves throughout the financial industry. Many analysts are still wondering how a once proud institution could fall so quickly. One aspect of the bank collapse raised concerns, however: the actions taken by CEO Greg Becker who sold more than 12,000 SVB stock for $3.6million just 11 days before the regulators closed the bank.
Becker’s actions were not illegal in themselves – he was a shareholder and had the right to sell at any time. However, the negative impact of this situation is undeniable. Many observers believe that Becker knew about the bank’s financial crisis and decided to sell his shares before it went under.
This is bad for Becker, and for Silicon Valley Bank in general. Becker, as the CEO of Silicon Valley Bank, is responsible for acting to the benefit of his employees, shareholders and customers. The fact that Becker sold his shares days before the bank closed sends the message that he cared more about his own financial health than the well-being institution he had been charged with leading.
It’s important to remember that the failure of Silicon Valley Bank wasn’t solely Becker’s fault or anyone else. The bank faced a number serious challenges including a run of deposits which saw $42 billion withdrew by March 9th. This left the institution with an enormous deficit.
Becker’s actions have a very negative optic. At a time when the trust in financial institutions has already reached an all-time high, it is troubling to see a CEO selling his shares days before the collapse of the bank that he runs.
Becker’s decision to sell shares is not unique. In the days before the collapse of the bank, many SVB insiders, including its general counsel, Chief marketing officer, and chief financial officer, sold their shares.
These sales are not illegal, but they raise serious concerns about the culture of Silicon Valley Bank and its leadership. After the bank collapsed, many shareholders and customers are left wondering if the executives of the bank were more interested in lining their pockets than managing the institution responsibly.
It’s obvious that the failure of Silicon Valley Bank has far-reaching implications for the financial sector. In the coming days and weeks, it’s clear that Becker and the other insiders involved will be closely scrutinized. Although there’s no doubt they were within their rights to sell their stock, their actions have a negative impact on the bank.
