Both regulatory bodies, the Securities and Exchange Commission (SEC) and the Financial Industry Regulatory Authority (FINRA), are investigating the activities of Goldman Sachs during its unsuccessful capital raise preceding the downfall of Silicon Valley Bank. Here are the most important things to know about this investigation:
1. The investigation centers around Goldman Sachs’ role in the capital raise for Silicon Valley Bank, which ultimately failed. Silicon Valley Bank was a startup bank that focused on lending to technology companies in the Silicon Valley area. In 2008, it ran into financial trouble and was acquired by another bank.
2. The SEC and FINRA are looking into whether Goldman Sachs provided adequate disclosure to investors during the capital raise. Specifically, they are investigating whether Goldman Sachs disclosed the risks associated with investing in Silicon Valley Bank, and whether they accurately represented the bank’s financial health.
3. This investigation is part of a broader trend of increased scrutiny of Wall Street banks in the wake of the 2008 financial crisis. Regulators are looking to hold banks accountable for their role in the crisis, and to ensure that they are operating in a way that is transparent and fair to investors.
In summary, both the SEC and FINRA are investigating Goldman Sachs’ activities during the capital raise for Silicon Valley Bank, with a focus on whether adequate disclosure was provided to investors. This investigation is part of a broader trend of increased regulatory scrutiny of Wall Street banks in the wake of the 2008 financial crisis.