The Department of Justice and the U.S. Securities and Exchange Commission are launching an investigation into the collapse of Silicon Valley Bank. This was a development that I hope everyone was expecting since this is the second-largest bank failure in American history. Spencer wrote that its collapse has also led to our banking system being downgraded. Yet, NBC News warned that these investigations are in the preliminary phase, and it could lead to zero charges being brought (via NBC News):
The Department of Justice has opened an investigation into last week's collapse of Silicon Valley Bank, three sources familiar with the matter confirmed to NBC News on Tuesday.
The Securities and Exchange Commission has opened its own investigation as well, two of the sources said.
The investigations come days after the California Department of Financial Protection and Innovation took over and closed Silicon Valley Bank to protect deposits, naming the Federal Deposit Insurance Corp. as its receiver.
[…]
The Wall Street Journal first reported the DOJ and SEC investigations, citing people familiar with the matter. That report said the probes are in the beginning stages and might not lead to charges or allegations of wrongdoing.
Breaking News: The Justice Department has opened an investigation into the collapse of Silicon Valley Bank, two people with knowledge of the matter said. https://t.co/K45tuKefrC
— The New York Times (@nytimes) March 14, 2023
Pres. Biden says those who invested in failed Silicon Valley Bank and Signature Bank will not be protected: “They knowingly took a risk and when the risk didn’t pay off, investors lose their money. That’s how capitalism works.” https://t.co/HWi82gAbJP pic.twitter.com/3hVKFJqmZt
— ABC News (@ABC) March 13, 2023
SVB tanked due to shoddy investments and not hiring a risk assessment officer for almost a year. The Federal Reserve rate hikes have been blamed for accelerating the bank's demise, but let’s get real regarding how this institution came tumbling down. It wasn’t because of the Fed’s rate hikes.