US Justice Department, SEC probing Goldman role in Silicon Valley Bank’s last days
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When Silicon Valley Bank collapsed on March 10, it was one of the biggest bank failures in US history.
PHOTO: REUTERS
Washington - Justice Department prosecutors are among the United States officials who have queried Goldman Sachs Group over its role in Silicon Valley Bank’s (SVB) attempt to raise funds
The scrutiny by the agency’s fraud section and the US Attorney’s Office for the Northern District of California is part of a broader review of the final days of SVB, said the person, who asked not to be named discussing the confidential investigation.
The Securities and Exchange Commission (SEC) is also reviewing the matter, the person said.
SVB offloaded a US$24 billion (S$32 billion) portfolio to Goldman at a loss and sought the company’s help in raising more than US$2.2 billion to cover the shortfall, according to disclosures in March.
Goldman could not pull off the deal and a bank run in the wake of that offering effectively doomed SVB.
Goldman bank disclosed in May that it was cooperating and providing information to the government in connection with investigations and inquiries into SVB.
“SVB engaged Goldman Sachs to assist with a proposed capital raise and sold the firm a portfolio of securities,” Goldman said in a statement on Thursday, reiterating that it was cooperating with the government’s queries.
“Prior to that sale, Goldman Sachs informed SVB in writing that we would not act as their adviser on the sale, and that SVB should not rely on any advice from the bank in this regard, but instead hire a third-party financial adviser.”
The Wall Street Journal reported earlier on Thursday that Goldman had been subpoenaed by the Justice Department, which declined to comment.
The SEC also declined to comment. The queries do not mean Goldman has been accused of wrongdoing, and investigations are sometimes closed without any further action.
When SVB collapsed on March 10
