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U.S. SEC Investigates Withdrawals Before The Silicon Valley Bank Collapse!

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According to a Bloomberg report, the U.S. Securities and Exchange Commission (SEC) is investigating withdrawals made from Silicon Valley Bank (SVB) before its collapse. The inquiry allegedly focuses on whether private equity firm executives withdrew funds from their personal accounts at the bank before their clients. The SEC has requested the necessary records, PYMNTS reports.

Hundreds of startups and venture capital firms did their banking and kept billions of dollars with SVB before it went under the Federal Deposit Insurance Corp. (FDIC) receivership on March 10, 2021. The FDIC took over SVB after customer withdrawals and plummeting stock prices beset the bank and its parent company when its $1.8 billion after-tax loss on the sale of its investments led some investors to grow concerned about its liquidity.

It is important to note that such requests do not necessarily indicate wrongdoing or lead to an official investigation. SEC Chair Gary Gensler has been placing increased scrutiny on the private equity industry, examining fees and seeking greater disclosure.

Following the collapse of Silicon Valley Bank, there have been calls for tighter banking regulations and investigations into executives at failed institutions. Startups and venture capital firms, which had significant ties with the bank, have since been diversifying their banking relationships and taking measures to ensure FDIC-insured balances.

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