US authorities examine Goldman Sachs’ function in Silicon Valley Bank collapse

US authorities have launched an investigation into Goldman Sachs‘ work with Silicon Valley Bank (SVB) in relation to the occasions that led to the collapse of the California-based financial institution. Goldman disclosed the probe in a current securities filing, noting that they’re cooperating and providing data to various authorities bodies. The investigation focuses on the bank’s activities for SVB in March, simply earlier than the tech-focused bank’s demise.
Goldman Sachs has confronted criticism over its dual roles with SVB, in which it advised SVB and purchased distressed debt in a deal that played an important part in the bank’s collapse. Free seized SVB on March 10 following a run on deposits. The financial institution reported two days earlier that it had lost US$1.8 billion from the sale of US$21 billion in securities.
On the identical day of the press launch, SVB introduced that it had enlisted Goldman Sachs to help with a deliberate capital increase. The disclosure of the buying and selling losses led to the market decoding the state of affairs as a sign of SVB’s desperation to boost cash to fulfill liquidity wants, finally resulting within the bank’s downfall..

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