The federal government has reportedly launched an investigation into the collapse of Silicon Valley Bank as they attempt to determine why and how the financial institution rapidly fell apart late last week, causing a run on the bank and the federal government to step in and seize SVB.
The Wall Street Journal reported Tuesday that the Justice Department and the Securities and Exchange Commission (SEC) have begun their probe into the collapse, which was the biggest since the beginning of the 2008 recession and one of the largest bank failures in United States history.
“Without speaking to any individual entity or person, we will investigate and bring enforcement actions if we find violations of the federal securities laws,” the SEC said in a statement.
The bank implosion came last Thursday when it no longer had enough cash on hand to pay out to its customers, prompting a run on the bank as people attempted to get their money out as quickly as possible to avoid catastrophe. By the end of the day, around $42 million was withdrawn from the bank, roughly a quarter of the bank's deposits.
According to The New York Times, investigators will likely be looking into any prearranged stock sales that occurred right before the bank's collapse to ensure that no fraudulent activity occurred.
The Biden administration has already been forced to try and quell concerns following the run, guaranteeing that any customers would be able to withdraw their money beginning Monday.
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