U.S. officials are investigating the work Goldman Sachs did for Silicon Valley banks in the weeks before it collapsed, according to a regulatory filing by Goldman on Thursday.
Goldman said it was “cooperating with and providing information to various government agencies’ investigations and investigations” of the Silicon Valley Bank, which collapsed suddenly on March 10. Stock market panic over the fate of lenders, and others.
The study included “company operations with SVB around March 2023, when SVB contracted the company to assist in the proposed capital raising and SVB sold a portfolio of securities to the company.” Goldman filed with the Securities and Exchange Commission.
Goldman’s investment bankers have advised Silicon Valley bank executives to sell a $21 billion U.S. government bond portfolio that has been decimated by rising interest rates. Silicon Valley Bank did this in a matter of hours, revealing that he suffered a loss of $1.8 billion during the move. Goldman also tried to arrange the sale of its stake in Silicon Valley Bank.
Depositors at Silicon Valley banks reacted to the news by withdrawing billions of dollars, resulting in seizures by the Federal Deposit Insurance Corporation. A few days later, another bank, Signature Bank, also collapsed, and this week regulators seized and sold his First Republic Bank.
Since the crisis began, stocks of many smaller banks have taken a beating as investors try to bet on which bank might go down next. The declines in the stock prices of companies such as PacWest Bancorp and Western Alliance have come despite lenders trying to reassure investors that they are financially sound.
Goldman did not disclose which regulators are investigating. In March, days after the Silicon Valley Bank collapse, a group of House Democrats sent letters to the SEC, FDIC, and Justice Department secretaries, Exploring the role of Goldman Sachs As an advisor to a small bank.
A spokeswoman for Goldman Sachs declined to comment further.
