Federal Regulators Take Control of Silicon Valley Bank
EDITOR'S NOTE: The collapse of Silicon Valley Bank is still sending shockwaves through the financial world, but new details emerging about the bank's final hours are adding fuel to an already raging fire. According to a stunning report, SVB executives approved company-wide bonuses just hours before the bank's sudden collapse, leaving many wondering if the institution's leaders knew the end was near and were desperately trying to keep their employees from jumping ship. With accusations of mismanagement and negligence already swirling around SVB, this latest revelation is sure to stoke the flames of outrage and raise serious questions about the bank's culture of greed and recklessness. As the fallout from SVB's collapse continues to unfold, one thing is becoming increasingly clear: the once-promising institution was built on a foundation of sand. How many other banks are in an equally precarious position, yet still undetected?
Federal regulators took control of Silicon Valley Bank on Friday
Silicon Valley Bank employees received their annual bonuses on Friday just hours before the government took control of the company, according to reports.
SVB traditionally processes annual bonuses on the second Friday of March, unnamed sources associated with the bank told CNBC. The bonuses were reportedly for work completed in 2022.
SVB did not immediately respond to a request for comment from Fox News Digital.
The Santa Clara, California-based band collapsed last week and is now under the control of federal regulators. SVB had been the 16th-largest bank in the U.S. prior to the bank run that led to its downfall.
The bank held a reputation as a go-to for a number of Silicon Valley industries and startups. Y Combinator, an incubator startup that launched Airbnb, DoorDash and DropBox, regularly referred entrepreneurs to them.
SVB's collapse was so quick that, hours before its closure, some industry analysts were hopeful that the bank was still a good investment. The bank’s shares had fallen by 60% on Friday morning after a similar drop the day before.
Anxious depositors rushed to withdraw their money over concern for the bank’s health, causing its collapse, which may serve as "an extinction-level event for startups," according to Y Combinator CEO Garry Tan.
Entrepreneur and Dallas Mavericks owner Mark Cuban called for federal regulators to buy out the bank earlier on Friday.
"The Fed should IMMEDIATELY buy all the securities/debt the bank owns at near par, which should be enough to cover most deposits," Cuban wrote as part of a lengthy Twitter chain last week. "Any losses paid for in equity and new debt from the new bank or whoever buys it. The Fed knew this was a risk. They should own it."
"If the Fed doesn’t own it, trust in the banking system becomes an issue," Cuban argued. "There are a ton of banks with more than 50 pct uninsured deposits."
Originally published by: Anders Hagstrom and Peter Aitken on FOX Business
