Silicon Valley Bank insiders borrowed a record $219 million from the lender as its troubles built
- Silicon Valley Bank made loans worth $219 million to insiders as its troubles built, per Bloomberg.
- The record high loans in the final months of 2022 were triple the amount of the quarter before.
In the lead-up to Silicon Valley Bank's historic collapse, insiders at the California-based lender scooped up a record $219 million worth of loans.
SVB issued the loans to company bigwigs — from directors to key shareholders — in the last quarter of 2022, Bloomberg reported Tuesday.
The tally was three times the dollar amount borrowed by higher-ups in the quarter before that and the highest in at least 20 years, according to government data.
SVB collapsed on March 10, when US regulators seized control of the once-trusted lender to startups and VC firms — the second-biggest bank failure in US history. Its downfall was sparked by a failed capital raise and a run on its deposits that crushed its finances.
Its seizure sent shockwaves through the US banking system amid fears of contagion effects spilling over to a global banking crisis, culminating in the recent takeover of Credit Suisse by UBS over the weekend.
US authorities, including the Department of Justice and the Securities and Exchange Commission, are looking into what went on at SVB before its sudden downfall this month. The loans could come under their probe.
The Federal Reserve spotted red flags at SVB years before it collapsed, including liquidity worries, according to a report from the New York Times.
SVB did not immediately respond to an Insider request for comment.