US regulators have begun investigating whether there was any misconduct at Silicon Valley Bank and Signature Bank prior to their respective failures earlier this month.
Investigations have begun into “directors, officers, professional service providers and other institution-affiliated parties of the banks,” Federal Deposit Insurance Corporation chairman Martin Gruenberg told Congress on Monday.
He said it was “worth noting that these two institutions were allowed to fail”.
The Securities and Exchange Commission has also begun probes, Reuters reported, adding some SBV executives were hiring lawyers in response to government investigations.
SBV’s sudden collapse was sparked by dispositors withdrawing US$42bn in a single day as part of a social-media fuelled bank run, with Signature Bank failing just two days later.
Events during recent weeks had raised questions over what executives knew and told investors about the banks’ struggles, a Reuters source said.