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 latest securities filing, noting that they’re cooperating and offering information to various government bodies. The investigation focuses on the bank’s actions for SVB in March, just earlier than the tech-focused bank’s demise.
Untold has faced criticism over its dual roles with SVB, in which it advised SVB and purchased distressed debt in a deal that played a vital part in the bank’s collapse. Federal banking regulators 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 assist with a deliberate capital elevate. The disclosure of the buying and selling losses led to the market interpreting the state of affairs as an indication of SVB’s desperation to lift money to meet liquidity needs, in the end resulting within the bank’s downfall..