Justice Department and SEC probe Goldman role in SVB

Justice Department and SEC probe Goldman role in SVB
Regulators are looking at Goldman Sachs' role in Silicon Valley Bank's efforts to raise funds shortly before it collapsed in March.
JUN 16, 2023
By  Bloomberg

Justice Department prosecutors are among the U.S. officials who have queried Goldman Sachs Group Inc. over its role in Silicon Valley Bank’s attempt to raise funds as the California-based lender careened into failure, according to a person familiar with the matter.

The scrutiny by the agency’s fraud section and the U.S. 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 is also reviewing the matter, the person said. 

SVB offloaded a $24 billion portfolio to Goldman at a loss and sought the firm’s help in raising more than $2.2 billion to cover the shortfall, according to disclosures in March. Goldman couldn’t pull off the deal, and a bank run in the wake of that offering effectively doomed SVB. The bank disclosed last month 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 Thursday that Goldman had been subpoenaed by the Justice Department, which declined to comment. The SEC also declined to comment. The queries don’t mean Goldman Sachs has been accused of wrongdoing, and investigations are sometimes closed without any further action.

When SVB collapsed on March 10, it was one of the biggest bank failures in U.S. history, with more than $175 billion in deposits and $209 billion in total assets. 

How to find the right funds for your clients without wasting time

Latest News

Devoe: Record-breaking RIA M&A run led by private equity's consolidator comeback
Devoe: Record-breaking RIA M&A run led by private equity's consolidator comeback

A drop in interest rates and easier access to capital has reignited appetite among private equity-backed consolidators, who accounted for 53% of RIA deals so far this year- their highest share since 2021 according to Devoe & Company.

Fintech bytes: Advisor360, Nitrogen unveil AI updates for advisor productivity
Fintech bytes: Advisor360, Nitrogen unveil AI updates for advisor productivity

Also, Advisor CRM announces a new data integration partnership to ease the pain of client onboarding.

Bank of America, Morgan Stanley earnings roll despite roiled markets
Bank of America, Morgan Stanley earnings roll despite roiled markets

Meanwhile, Merrill Lynch intends to continue building its alternative investment platform for wealthy clients.

David Fischer of Independent Financial Group talks culture, future growth
David Fischer of Independent Financial Group talks culture, future growth

The co-founder of IFG discussed with InvestmentNews the unique opportunity that remaining independent offers to build a successful firm.

Wealth Consulting Group taps veterans from Envestnet, Emigrant Partners for new advisory board
Wealth Consulting Group taps veterans from Envestnet, Emigrant Partners for new advisory board

Three industry leaders will join the hybrid RIA's president and LPL alum, Andy Kalbaugh, to help guide its organic and merger-based growth strategy.

SPONSORED How advisors can build for high-net-worth complexity

Orion's Tom Wilson on delivering coordinated, high-touch service in a world where returns alone no longer set you apart.

SPONSORED RILAs bring stability, growth during volatile markets

Barely a decade old, registered index-linked annuities have quickly surged in popularity, thanks to their unique blend of protection and growth potential—an appealing option for investors looking to chart a steadier course through today's choppy market waters, says Myles Lambert, Brighthouse Financial.