Signature Bank's top executives secretly sold shares worth $ 100 million: report

Signature Bank's top executives secretly sold shares worth $ 100 million: report

The insiders of the now dissolved Signature Bank have reportedly sold shares worth over $ 100 million in the years after the bank had shifted its focus on cryptocurrency companies.

According to an analysis carried out by the Wall Street Journal, the chairman of the Signature Bank, its former Chief Executive Officer and his successor have shared shares worth around $ 50 million in the past three years. The trio, whose sales made up around half of the sales volume, belonged to the board committee last year, which was responsible for monitoring the bank's risk profile.

insider transactions

The transactions of the bank insiders are secret because they were not clear in the official documents, the WSJ research stated. The securities rules and the submission method also contributed to the fact that the sales were unnoticed.

The Signature Bank has been active for more than two decades, and its collapse on March 12th was part of a series of bank closings, which also included Silvergate Capital and Silicon Valley Bank (SVB). After signature had accepted the crypto industry during the bull run, the insoles of signature rose by 68 %in 2021.

In addition, the introduction of bank stocks in the same year recorded a profit of 140 %. The WSJ's research estimated that the insiders took $ 70 million from stock sales this year. That is twice as much as 2020.

A large part of the shares sold by the managers in spring 2021 for almost $ 220. It is important to note that the share was already in an upward trend and finally reached a record high of $ 366 in early 2022

While Signature did not keep or awarded cryptocurrency, an internal payment platform called Signet was used by crypto companies to manage their cash. The original draft for Signet was designed by Scott Shay, the chairman of Signature, who described himself as "crypto enthusiasts", as the report mentioned.

banking show that in 2021 he sold shares worth $ 5.4 million. During the same period, he also bought shares worth $ 1.5 million and in 2023, shortly before the top-class collapse, around $ 644,000. Joseph Depaolo, the bank's CEO, and Eric Howell, joined Shay, and her Chief Operating Officer, who in 2021 shares worth $ 13.9 million

In addition, signature was one of only two companies in the S&P 500 that did not submit insider -trade transactions to Securities and Exchange Commission (SEC).

regulatory problems

The officials were particularly concerned when the bank picked up preventive measures to monitor transactions on "signs of crime" and to check the account holder properly. In addition, the SEC also examined the bank's business, but details of the investigation were not announced.

The signature was placed in forced administration by the Federal Deposit Insurance Corporation (FDIC), the tender procedure for its remaining business activities. Last week the FDIC published a message to the remaining crypto customers of the bank to close all of their accounts by April 5th.

The agency now intends to market a loan portfolio of $ 60 billion in the coming months, which mainly includes commercial real estate loans, commercial loans and a small pool of loans for single-family houses.

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