Source: United States Senator for New Jersey Bob Menendez
WASHINGTON, D.C. – U.S. Senator Bob Menendez (D-N.J.), a senior member of the U.S. Senate Committee on Banking, Housing, and Urban Affairs, today pressed witnesses, Gregory Becker, former CEO of Silicon Valley Bank (SVB), and Scott Shay, former chairman and co-founder of Signature Bank, during a hearing entitled “Examining the Failures of Silicon Valley Bank and Signature Bank.”
The Senator highlighted how eleven days before SVB failed under Gregory Becker’s watch, he sold $3.6 million worth of stock pursuant to a 10b5-1 plan filed by Mr. Becker in late January. 10b5-1 plans allow corporate insiders to sell shares by determining in advance the share price, number of shares, and transaction date. Sen. Menendez asked him if he was aware that Silicon Valley Bank was in trouble when the 10b5-1 was filed. In late March, Sen. Menendez signed a letter led by Chair Sherrod Brown to Securities and Exchange Commission (SEC) Chair Gensler requesting prompt examinations of these sales.
“In your written testimony, you’ve claimed that when you crafted your plan you believed you were ‘not in possession of any material non-public information at that time.’ However, in the past two years, the Federal Reserve issued not one, not two, but THIRTY supervisory findings which identified issues in areas like risk management, board effectiveness, and interest rate risk simulation and modeling, all of which directly contributed to the bank’s collapse,” said Sen. Menendez. “These findings were not publicly available. All of this happened in a two-year span when you and other executives sold $84 million dollars of SVB stock.”
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The Senator also asked Gregory Becker if he believed he and his colleagues earned the bonuses paid on March 10, 2023, which were approved by SVB’s Compensation Committee to reward executives and employees for their 2022 performance. According to public reporting, these bonuses were paid mere hours before regulators seized the bank.
“In 2019, a Bloomberg report found that SVB, First Republic, and Signature were the three highest-paying publicly-traded banks in the country. It’s no coincidence then, that those banks are now better known for three of the largest bank failures in U.S. history,” added Sen. Menendez. “Clearly the compensation structure at your institution was not in line with the long-term interests of your shareholders and deposit holders. I hope to work with my colleagues on legislation to rein in risky incentive-based compensation plans that leave taxpayer(s) footing the bill when banks fail.”
Sen. Menendez concluded by grilling Scott Shay about bank management failures as detailed in supervisory reports from the Federal Reserve and Federal Deposit Insurance Corporation (FDIC). These reports stated that after the Republican-led Congress relaxed supervisory requirements on midsized banks in 2018, both Silicon Valley Bank and Signature Bank rapidly expanded without ensuring their risk management and corporate governance practices could keep up.
“I’m glad to hear you say that [yes] now, but it’s too little too late. According to the FDIC, Signature’s management ‘pursued rapid, unrestrained growth without developing and maintaining adequate risk management practices and controls appropriate for the size, complexity and risk profile of the institution,’” concluded Sen. Menendez. “Now, as I sit here, I hear you testify all collectively that you did everything right. Something happened because the banks failed.”
In late March, Sen. Menendez signed a letter led by Chair Sherrod Brown to Securities and Exchange Commission (SEC) Chair Gensler requesting prompt examinations of these sales. Also in March, the Senator joined with Sens. Cory Booker and Elizabeth Warren, Congresswoman Katie Porter and dozens of Senate and House colleagues to introduce the Secure Viable Banking Act, legislation that would repeal Title IV of S.2155, the Economic Growth, Regulatory Relief, and Consumer Protection Act of 2018 following the collapse of Silicon Valley Bank and Signature Bank. Sen. Menendez is a longtime consumer protection advocate, and was outspoken about the dangers of passing S.2155, the Economic Growth, Regulatory Relief, and Consumer Protection Act, five years ago, which reduced critical oversight and capital requirements for large banks.
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WASHINGTON, D.C. – U.S. Senator Bob Menendez (D-N.J.), a senior member of the U.S. Senate Committee on Banking, Housing, and Urban Affairs, today pressed witnesses, Gregory Becker, former CEO of Silicon Valley Bank (SVB), and Scott Shay, former chairman and co-founder of Signature Bank, during a hearing entitled “Examining the Failures of Silicon Valley Bank and Signature Bank.”
The Senator highlighted how eleven days before SVB failed under Gregory Becker’s watch, he sold $3.6 million dollars worth of stock pursuant to a 10b5-1 plan filed by Mr. Becker in late January. 10b5-1 plans allow corporate insiders to sell shares by determining in advance the share price, number of shares, and transaction date. Sen. Menendez asked him if he was aware that Silicon Valley Bank was in trouble when the 10b5-1 was filed. In late March, Sen. Menendez signed a letter led by Chair Sherrod Brown to Securities and Exchange Commission (SEC) Chair Gensler requesting prompt examinations of these sales.
“In your written testimony, you’ve claimed that when you crafted your plan you believed you were ‘not in possession of any material non-public information at that time.’ However, in the past two years, the Federal Reserve issued not one, not two, but THIRTY supervisory findings which identified issues in areas like risk management, board effectiveness, and interest rate risk simulation and modeling, all of which directly contributed to the bank’s collapse,” said Sen. Menendez. “These findings were not publicly available. All of this happened in a two-year span when you and other executives sold $84 million dollars of SVB stock.”
[CLICK HERE TO WATCH THE SENATOR’S REMARKS]
The Senator also asked Gregory Becker if he believed he and his colleagues earned the bonuses paid on March 10, 2023, which were approved by SVB’s Compensation Committee to reward executives and employees for their 2022 performance. According to public reporting, these bonuses were paid mere hours before regulators seized the bank.
“In 2019, a Bloomberg report found that SVB, First Republic, and Signature were the three highest-paying publicly-traded banks in the country. It’s no coincidence then, that those banks are now better known for three of the largest bank failures in U.S. history,” added Sen. Menendez. “Clearly the compensation structure at your institution was not in line with the long-term interests of your shareholders and deposit holders. I hope to work with my colleagues on legislation to rein in risky incentive-based compensation plans that leave taxpayer(s) footing the bill when banks fail.”
Sen. Menendez concluded by grilling Scott Shay about bank management failures as detailed in supervisory reports from the Federal Reserve and Federal Deposit Insurance Corporation (FDIC). These reports stated that after the Republican-led Congress relaxed supervisory requirements on midsized banks in 2018, both Silicon Valley Bank and Signature Bank rapidly expanded without ensuring their risk management and corporate governance practices could keep up.
“I’m glad to hear you say that [yes] now, but it’s too little too late. According to the FDIC, Signature’s management ‘pursued rapid, unrestrained growth without developing and maintaining adequate risk management practices and controls appropriate for the size, complexity and risk profile of the institution,’” concluded Sen. Menendez. “Now, as I sit here, I hear you testify all collectively that you did everything right. Something happened because the banks failed.”
In late March, Sen. Menendez signed a letter led by Chair Sherrod Brown to Securities and Exchange Commission (SEC) Chair Gensler requesting prompt examinations of these sales. Also in March, the Senator joined with Sens. Cory Booker and Elizabeth Warren, Congresswoman Katie Porter and dozens of Senate and House colleagues to introduce the Secure Viable Banking Act, legislation that would repeal Title IV of S.2155, the Economic Growth, Regulatory Relief, and Consumer Protection Act of 2018 following the collapse of Silicon Valley Bank and Signature Bank. Sen. Menendez is a longtime consumer protection advocate, and was outspoken about the dangers of passing S.2155, the Economic Growth, Regulatory Relief, and Consumer Protection Act, five years ago, which reduced critical oversight and capital requirements for large banks.
WASHINGTON, D.C. – U.S. Senator Bob Menendez (D-N.J.), a senior member of the U.S. Senate Committee on Banking, Housing, and Urban Affairs, today pressed witnesses, Gregory Becker, former CEO of Silicon Valley Bank (SVB), and Scott Shay, former chairman and co-founder of Signature Bank, during a hearing entitled “Examining the Failures of Silicon Valley Bank and Signature Bank.”
The Senator highlighted how eleven days before SVB failed under Gregory Becker’s watch, he sold $3.6 million dollars worth of stock pursuant to a 10b5-1 plan filed by Mr. Becker in late January. 10b5-1 plans allow corporate insiders to sell shares by determining in advance the share price, number of shares, and transaction date. Sen. Menendez asked him if he was aware that Silicon Valley Bank was in trouble when the 10b5-1 was filed. In late March, Sen. Menendez signed a letter led by Chair Sherrod Brown to Securities and Exchange Commission (SEC) Chair Gensler requesting prompt examinations of these sales.
“In your written testimony, you’ve claimed that when you crafted your plan you believed you were ‘not in possession of any material non-public information at that time.’ However, in the past two years, the Federal Reserve issued not one, not two, but THIRTY supervisory findings which identified issues in areas like risk management, board effectiveness, and interest rate risk simulation and modeling, all of which directly contributed to the bank’s collapse,” said Sen. Menendez. “These findings were not publicly available. All of this happened in a two-year span when you and other executives sold $84 million dollars of SVB stock.”
[CLICK HERE TO WATCH THE SENATOR’S REMARKS]
The Senator also asked Gregory Becker if he believed he and his colleagues earned the bonuses paid on March 10, 2023, which were approved by SVB’s Compensation Committee to reward executives and employees for their 2022 performance. According to public reporting, these bonuses were paid mere hours before regulators seized the bank.
“In 2019, a Bloomberg report found that SVB, First Republic, and Signature were the three highest-paying publicly-traded banks in the country. It’s no coincidence then, that those banks are now better known for three of the largest bank failures in U.S. history,” added Sen. Menendez. “Clearly the compensation structure at your institution was not in line with the long-term interests of your shareholders and deposit holders. I hope to work with my colleagues on legislation to rein in risky incentive-based compensation plans that leave taxpayer(s) footing the bill when banks fail.”
Sen. Menendez concluded by grilling Scott Shay about bank management failures as detailed in supervisory reports from the Federal Reserve and Federal Deposit Insurance Corporation (FDIC). These reports stated that after the Republican-led Congress relaxed supervisory requirements on midsized banks in 2018, both Silicon Valley Bank and Signature Bank rapidly expanded without ensuring their risk management and corporate governance practices could keep up.
“I’m glad to hear you say that [yes] now, but it’s too little too late. According to the FDIC, Signature’s management ‘pursued rapid, unrestrained growth without developing and maintaining adequate risk management practices and controls appropriate for the size, complexity and risk profile of the institution,’” concluded Sen. Menendez. “Now, as I sit here, I hear you testify all collectively that you did everything right. Something happened because the banks failed.”
In late March, Sen. Menendez signed a letter led by Chair Sherrod Brown to Securities and Exchange Commission (SEC) Chair Gensler requesting prompt examinations of these sales. Also in March, the Senator joined with Sens. Cory Booker and Elizabeth Warren, Congresswoman Katie Porter and dozens of Senate and House colleagues to introduce the Secure Viable Banking Act, legislation that would repeal Title IV of S.2155, the Economic Growth, Regulatory Relief, and Consumer Protection Act of 2018 following the collapse of Silicon Valley Bank and Signature Bank. Sen. Menendez is a longtime consumer protection advocate, and was outspoken about the dangers of passing S.2155, the Economic Growth, Regulatory Relief, and Consumer Protection Act, five years ago, which reduced critical oversight and capital requirements for large banks.
WASHINGTON, D.C. – U.S. Senator Bob Menendez (D-N.J.), a senior member of the U.S. Senate Committee on Banking, Housing, and Urban Affairs, today pressed witnesses, Gregory Becker, former CEO of Silicon Valley Bank (SVB), and Scott Shay, former chairman and co-founder of Signature Bank, during a hearing entitled “Examining the Failures of Silicon Valley Bank and Signature Bank.”
The Senator highlighted how eleven days before SVB failed under Gregory Becker’s watch, he sold $3.6 million dollars worth of stock pursuant to a 10b5-1 plan filed by Mr. Becker in late January. 10b5-1 plans allow corporate insiders to sell shares by determining in advance the share price, number of shares, and transaction date. Sen. Menendez asked him if he was aware that Silicon Valley Bank was in trouble when the 10b5-1 was filed. In late March, Sen. Menendez signed a letter led by Chair Sherrod Brown to Securities and Exchange Commission (SEC) Chair Gensler requesting prompt examinations of these sales.
“In your written testimony, you’ve claimed that when you crafted your plan you believed you were ‘not in possession of any material non-public information at that time.’ However, in the past two years, the Federal Reserve issued not one, not two, but THIRTY supervisory findings which identified issues in areas like risk management, board effectiveness, and interest rate risk simulation and modeling, all of which directly contributed to the bank’s collapse,” said Sen. Menendez. “These findings were not publicly available. All of this happened in a two-year span when you and other executives sold $84 million dollars of SVB stock.”
[CLICK HERE TO WATCH THE SENATOR’S REMARKS]
The Senator also asked Gregory Becker if he believed he and his colleagues earned the bonuses paid on March 10, 2023, which were approved by SVB’s Compensation Committee to reward executives and employees for their 2022 performance. According to public reporting, these bonuses were paid mere hours before regulators seized the bank.
“In 2019, a Bloomberg report found that SVB, First Republic, and Signature were the three highest-paying publicly-traded banks in the country. It’s no coincidence then, that those banks are now better known for three of the largest bank failures in U.S. history,” added Sen. Menendez. “Clearly the compensation structure at your institution was not in line with the long-term interests of your shareholders and deposit holders. I hope to work with my colleagues on legislation to rein in risky incentive-based compensation plans that leave taxpayer(s) footing the bill when banks fail.”
Sen. Menendez concluded by grilling Scott Shay about bank management failures as detailed in supervisory reports from the Federal Reserve and Federal Deposit Insurance Corporation (FDIC). These reports stated that after the Republican-led Congress relaxed supervisory requirements on midsized banks in 2018, both Silicon Valley Bank and Signature Bank rapidly expanded without ensuring their risk management and corporate governance practices could keep up.
“I’m glad to hear you say that [yes] now, but it’s too little too late. According to the FDIC, Signature’s management ‘pursued rapid, unrestrained growth without developing and maintaining adequate risk management practices and controls appropriate for the size, complexity and risk profile of the institution,’” concluded Sen. Menendez. “Now, as I sit here, I hear you testify all collectively that you did everything right. Something happened because the banks failed.”
In late March, Sen. Menendez signed a letter led by Chair Sherrod Brown to Securities and Exchange Commission (SEC) Chair Gensler requesting prompt examinations of these sales. Also in March, the Senator joined with Sens. Cory Booker and Elizabeth Warren, Congresswoman Katie Porter and dozens of Senate and House colleagues to introduce the Secure Viable Banking Act, legislation that would repeal Title IV of S.2155, the Economic Growth, Regulatory Relief, and Consumer Protection Act of 2018 following the collapse of Silicon Valley Bank and Signature Bank. Sen. Menendez is a longtime consumer protection advocate, and was outspoken about the dangers of passing S.2155, the Economic Growth, Regulatory Relief, and Consumer Protection Act, five years ago, which reduced critical oversight and capital requirements for large banks.
WASHINGTON, D.C. – U.S. Senator Bob Menendez (D-N.J.), a senior member of the U.S. Senate Committee on Banking, Housing, and Urban Affairs, today pressed witnesses, Gregory Becker, former CEO of Silicon Valley Bank (SVB), and Scott Shay, former chairman and co-founder of Signature Bank, during a hearing entitled “Examining the Failures of Silicon Valley Bank and Signature Bank.”
The Senator highlighted how eleven days before SVB failed under Gregory Becker’s watch, he sold $3.6 million dollars worth of stock pursuant to a 10b5-1 plan filed by Mr. Becker in late January. 10b5-1 plans allow corporate insiders to sell shares by determining in advance the share price, number of shares, and transaction date. Sen. Menendez asked him if he was aware that Silicon Valley Bank was in trouble when the 10b5-1 was filed. In late March, Sen. Menendez signed a letter led by Chair Sherrod Brown to Securities and Exchange Commission (SEC) Chair Gensler requesting prompt examinations of these sales.
“In your written testimony, you’ve claimed that when you crafted your plan you believed you were ‘not in possession of any material non-public information at that time.’ However, in the past two years, the Federal Reserve issued not one, not two, but THIRTY supervisory findings which identified issues in areas like risk management, board effectiveness, and interest rate risk simulation and modeling, all of which directly contributed to the bank’s collapse,” said Sen. Menendez. “These findings were not publicly available. All of this happened in a two-year span when you and other executives sold $84 million dollars of SVB stock.”
[CLICK HERE TO WATCH THE SENATOR’S REMARKS]
The Senator also asked Gregory Becker if he believed he and his colleagues earned the bonuses paid on March 10, 2023, which were approved by SVB’s Compensation Committee to reward executives and employees for their 2022 performance. According to public reporting, these bonuses were paid mere hours before regulators seized the bank.
“In 2019, a Bloomberg report found that SVB, First Republic, and Signature were the three highest-paying publicly-traded banks in the country. It’s no coincidence then, that those banks are now better known for three of the largest bank failures in U.S. history,” added Sen. Menendez. “Clearly the compensation structure at your institution was not in line with the long-term interests of your shareholders and deposit holders. I hope to work with my colleagues on legislation to rein in risky incentive-based compensation plans that leave taxpayer(s) footing the bill when banks fail.”
Sen. Menendez concluded by grilling Scott Shay about bank management failures as detailed in supervisory reports from the Federal Reserve and Federal Deposit Insurance Corporation (FDIC). These reports stated that after the Republican-led Congress relaxed supervisory requirements on midsized banks in 2018, both Silicon Valley Bank and Signature Bank rapidly expanded without ensuring their risk management and corporate governance practices could keep up.
“I’m glad to hear you say that [yes] now, but it’s too little too late. According to the FDIC, Signature’s management ‘pursued rapid, unrestrained growth without developing and maintaining adequate risk management practices and controls appropriate for the size, complexity and risk profile of the institution,’” concluded Sen. Menendez. “Now, as I sit here, I hear you testify all collectively that you did everything right. Something happened because the banks failed.”
In late March, Sen. Menendez signed a letter led by Chair Sherrod Brown to Securities and Exchange Commission (SEC) Chair Gensler requesting prompt examinations of these sales. Also in March, the Senator joined with Sens. Cory Booker and Elizabeth Warren, Congresswoman Katie Porter and dozens of Senate and House colleagues to introduce the Secure Viable Banking Act, legislation that would repeal Title IV of S.2155, the Economic Growth, Regulatory Relief, and Consumer Protection Act of 2018 following the collapse of Silicon Valley Bank and Signature Bank. Sen. Menendez is a longtime consumer protection advocate, and was outspoken about the dangers of passing S.2155, the Economic Growth, Regulatory Relief, and Consumer Protection Act, five years ago, which reduced critical oversight and capital requirements for large banks.