Rep. Ro Khanna (D-Calif.) said that any stock sold by Silicon Valley Bank executives should be “clawed back” and given to depositors of the bank after it collapsed last week.
Federal filings show that Silicon Valley Bank CEO Gregory Becker sold over $3.5 million in stock in the bank roughly two weeks before the firm was taken over by federal regulators amid a bank run that saw depositors scrambling to get their money out.
“I do think all that money should be clawed back and given to the depositors,” Khanna said in an interview with CBS’s “Face The Nation.”
The takeover of the bank by the federal government has sent shockwaves through the tech industry, which relied heavily on the bank for financing. While the federal government insures deposits of up to $250,000, many companies had deposits with the bank that far exceeded that limit.
Federal officials said they were trying to find a solution for the bank. Lawmakers called on the government on Sunday to find a purchaser for the bank before markets opened back up in Asia later in the day, and before U.S. markets open tomorrow.
Treasury Secretary Janet Yellen said on Sunday that it was up to the Federal Deposit Insurance Corporation (FDIC) to decide how to proceed with the firm, but said she was sure they were considering an outside acquisition.
Khanna represents a Silicon Valley district, and said he had been in contact with the FDIC. He said the federal government may not be able to find a buyer for the bank without very active involvement by the Treasury and federal regulators.
“I don’t think you’re gonna get a private seller without the Treasury Department and FDIC being actively engaged in helping liquidity with these treasury bonds,” Khanna said.
Silicon Valley Bank used customer deposits in recent years to purchase a large volume of treasury bonds, which lost value as interest rates have been hiked over the past year, helping to create a large hole in the bank’s balance sheet.