A recent analysis by the Wall Street Journal revealed that insiders of Signature Bank SBNY, which had shifted its focus to cryptocurrency companies and subsequently gained popularity in the stock market, sold over $100 million worth of shares in the years following the bank’s collapse.
The company filings suggest that approximately 50% of the total shares sold were attributed to sales made by the bank’s chairman and current CEO over the past three years. These individuals were also part of the board committee responsible for managing the bank’s risk profile during the previous year.
Moreover, the insider transactions at Signature Bank were not widely publicized due to the location where they were filed, as well as how the transactions were described in the related documents.
Following a run on its deposits that was triggered by the collapses of SVB Financial Group and Silvergate Bank, Signature Bank was put into receivership by New York regulators on March 12. This was due to a “crisis of confidence” in the management team.
It is worth noting that both SVB and Signature Bank were among the largest bank failures in U.S. history, with Washington Mutual being the only bank with a larger failure. Meanwhile, New York Community Bancorp’s Flagstar Bank, which will be taking over all of Signature Bank’s cash deposits, declined to provide any comment on the matter.
The collapse of Signature Bank was a sudden and significant setback for the nearly 22-year-old bank. The bank had distinguished itself as one of the few lenders that had embraced the cryptocurrency industry.
The cash generated from this industry had resulted in a 68% increase in deposits in 2021, and the bank’s shares had soared by 140% during the same year. Insiders had also made substantial profits of $70 million from stock sales in that year, having sold twice as many shares as they had in 2020.
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Source: Cryptocurrency - investing.com
