SVB Chairman Sold 4.8 Billion Won Stake Just Before Bankruptcy... Coincidence?

Sudden Stock Sale After 1 Year, 11 Days Before Bankruptcy
"It Would Be a Problem If SVB Capital Raising Plan Was Known in Advance"

Silicon Valley Bank (SVB), which had served as a 'financial lifeline' for startups in the western United States, has declared bankruptcy, revealing that Greg Becker, Chairman and CEO, sold his SVB shares.

On the 10th (local time), Bloomberg reported, citing SVB disclosure documents, that CEO Becker sold 12,451 shares of the parent company SVB Financial last month, worth approximately $3.6 million (47.6 billion KRW).

Becker had reported his plan to sell shares to financial authorities on January 26, marking the first time he sold stock since about a year ago. SVB sent a letter to shareholders stating that it would issue shares to raise over $2 billion to offset losses from bond sales, which triggered a sharp decline in the company's stock price.

On the 9th, CEO Becker assured customers that "deposits are safe." However, on the same day, the stock price plummeted by 60.41%, and within about 14 hours, financial authorities declared the closure of SVB and initiated bankruptcy proceedings. SVB's bankruptcy is considered the second largest since the Washington Mutual bankruptcy handled by JP Morgan Chase during the 2008 financial crisis.

[Image source=Yonhap News]

Becker refused to answer whether he was aware of SVB's capital raising plans when he submitted his stock sale plan. SVB also did not respond.

Becker's sale of shares may have no legal issues and could be coincidental. Since 2000, regulations have been in place requiring employees to trade on predetermined dates when selling shares, designed to prevent insider trading?buying or selling securities using non-public corporate information.

Critics point out that the 'cooling-off period' between reporting the sale plan and the actual transaction was set too short, revealing a loophole in the regulations. The U.S. Securities and Exchange Commission (SEC) recently strengthened rules requiring employees to report share sales at least three months in advance. The new regulation will take effect from the 1st of next month, so it does not apply to CEO Becker.

Dan Taylor, a professor at the Wharton School of the University of Pennsylvania, pointed out, "If SVB was discussing capital raising plans at the time Becker announced his sale plan on January 26, then it becomes problematic."

SVB began operations in 1983 in Santa Clara, California, and operated 17 branches in California and Massachusetts. Especially as a bank specializing in technology companies, it has served as a financial lifeline for major U.S. IT startups and venture capital firms.

This content was produced with the assistance of AI translation services.