Senator Warren calls for insider-trading investigation of former SVB CEO

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Senator Elizabeth Warren is calling for an insider-trading investigation into former Silicon Valley Bank CEO Greg Becker following a Senate Banking Committee hearing Tuesday.

“There is enough that was said in this hearing today that there needs to be a full investigation,” Senator Warren told Yahoo Finance LIVE.

Becker was asked by several senators Tuesday if he was aware Silicon Valley Bank was in trouble when he sold stock in the weeks before the collapse. He said he believed he was not in possession of any material, non-public information despite knowing about roughly 30 unresolved supervisory matters.

He noted that he regularly sold the underlying shares of his stock options before they expired through 10b5-1 plans.

Warren responded to those comments during her Yahoo Finance LIVE interview Tuesday.

“The idea that … you actually blew a bank up," Warren said, "a bank that had a lot of business, a bank that was getting all kinds of warnings from regulators that you had taken on too much risk, and then want to claim that you used good judgment in running that bank, and then want to turn around and say, but you didn't have any knowledge about what was really happening when it comes to terms of insider trading."

“The bottom line here," she added, "it's all about how could they boost short-term profits, then take out money for themselves personally, and then keep all that money when the bank blew up. And that's the part Congress has got to put a stop to this."

Warren and a bipartisan cadre of senators including Catherine Cortez Masto (D-Nev.), Josh Hawley (R-Mo.), and Mike Braun (R-Ind.) have introduced a bill that would require federal regulators to claw back all or part of the compensation received by bank executives if a bank fails in the five-year period preceding the failure.

The bill would give the FDIC more authority to claw back compensation than it has right now.

Greg Becker, former CEO of Silicon Valley Bank, arrives to testify before the Senate Banking, Housing, and Urban Affairs Committee during a hearing on the failures of Silicon Valley Bank and Signature Bank, on Capitol Hill in Washington, DC, on May 16, 2023. (Photo by Mandel NGAN / AFP) (Photo by MANDEL NGAN/AFP via Getty Images)
Greg Becker testified before a Senate committee Tuesday. (Photo by Mandel NGAN / AFP) (Photo by MANDEL NGAN/AFP via Getty Images) · MANDEL NGAN via Getty Images

When asked whether she thought she could get the bill passed in the full Senate in short order, Warren said she thinks she can.

“I do. I have good partners in this,” said Warren. “We've got a lot of Democrats committed on this, but we also have a good group of Republicans. We haven't gotten everybody signed on the dotted line...but I feel very optimistic that we're going to have a good group of people. We’re asking [Senate Committee] Chairman Brown to let us mark this bill up... I think it's going to get good support. I think it's going to make it through.”

Warren said she is also worried that the nation's largest banks are only getting larger. JPMorgan Chase, the nation's biggest bank, recently acquired the bulk of First Republic after that lender failed. Treasury Secretary Janet Yellen has also said she expects more bank mergers that regulators would be open to approving.