Silicon Valley Bank Chief Executive Officer Greg Becker sold $3.6 million worth of company stocks fewer than two weeks before the bank’s failure on Friday.
Becker sold the stocks under a trading plan that saw the sale of 12,451 shares on February 27. The trading plan itself was filed on January 26. This is the first time in over a year that the SVB CEO had sold shares in the parent company.
A week before SVB’s failure, the tech company-focused bank had announced to its shareholders that it would be looking to raise over $2 billion in capital after suffering extensive losses. This announcement led to a steep decline in the company’s share price.
While Becker’s plan is not in any way illegal, critics of his decision commented on the loopholes of his trading plan, focusing particularly on its lack of a mandatory cooling-off period.
“While Becker may not have anticipated the bank run on Jan. 26 when he adopted the plan, the capital raise is material,” Dan Taylor, a professor at the University of Pennsylvania’s Wharton School commented. “If they were in discussion for a capital raise at the time the plan was adopted, that is highly problematic.”