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Signature Bank execs sold $100M in stock over the past three years

Вопрос-ответРубрика: QuestionsSignature Bank execs sold $100M in stock over the past three years
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Camilla Turgeon спросил 9 месяцев назад

Insiders at failed Signature Bank of New York sold more than $100 million worth of stock in the company in the three years prior to its collapse last month, according to a new report.The insider sales were not widely known previously because they were disclosed to regulators in a manner that is unusual for companies of Signature’s size, the reported on Tuesday. Of the insider stock sales, about half were done by three key executives, according to the Journal’s analysis: Chairman Scott Shay, CEO Joseph DePaolo, and chief operating officer Eric Howell.On March 12, Signature was seized by federal regulators and placed in receivership, following a run on deposits triggered by the collapse of days earlier.  SVB and Signature became the second- and third-largest bank failures in US history, after only the collapse of Washington Mutual at the height of the 2008 financial crisis.  Signature's Chairman Scott Shay CEO Joseph DePaolo COO Eric Howell Signature’s Chairman Scott Shay, CEO Joseph DePaolo, and COO Eric Howell were responsible for about half the $100 million in insider stock sales over the past three yearsSignature Bank was among a small number of FDIC-insured lenders that embraced cryptocurrency wholeheartedly, and the company’s stock price rose dramatically in 2021 following surge in Crypto market markets.Most of the insiders sold their 2021 shares in the spring at around $220, and prices continued to rise, peaking at $366 in January 2022.It is not illegal for company executives to buy and sell shares of their own companies, and many key execs receive much of their compensation in the form of stock.However, to avoid violating insider trading laws, they cannot make trades based on material, non-public information about the companies they oversee. Most use pre-defined trading plans, which automatically execute trades based on factors such as price and trading volume, and disclose the trades to regulators.Most companies of Signature’s size disclose insider trades to the Securities and Exchange Commission — but Signature reported the trades to the Federal Deposit Insurance Corporation.According to the Journal, Signature was one of only two companies in the S&P 500 that did not file its insider-trading transactions directly with the SEC. The other was First Republic Bank, which was rescued from disaster last month by a $30 billion deposit by a group of large banks. Most of the insiders sold their 2021 shares in the spring at around $220, and prices continued to rise, peaking at $366 in January 2022 Most of the insiders sold their 2021 shares in the spring at around $220, and prices continued to rise, peaking at $366 in January 2022 Signature was one of only two companies in the S&P 500 that did not file its insider-trading transactions directly with the SEC Signature was one of only two companies in the S&P 500 that did not file its insider-trading transactions directly with the SEC Due to a regulatory anomaly, executives at banks that do not have holding companies file transaction forms with the federal banking regulator instead of the SEC. Shay, DePaolo, and Howell could not be immediately reached by DailyMail.com, and declined to comment to the Journal.The SEC did not immediately respond to a request for comment. A spokeswoman for Flagstar Bank, a unit of New York Community Bancorp which agreed to take over Signature’s cash deposits, had no immediate comment. Separately, the SEC and Justice Department are reportedly probing insider stock transactions by executives at SVB before its collapse. Massachusetts regulators have also opened an investigation into sales of company stock by top executives at First Republic Bank. Meanwhile, JPMorgan Chairman and CEO Jaime Dimon, who spearheaded the industry rescue deal for First Republic, warned in a shareholder letter on Tuesday that the banking crisis isn’t over.’The current crisis is not yet over, and even when it is behind us, there will be repercussions from it for years to come,’ Dimon wrote in a 43-page annual message covering a wide range of topics. On March 12, Signature was seized by federal regulators and placed in receivership, following a run on deposits triggered by the collapse of Silicon Valley Bank days earlier On March 12, Signature was seized by federal regulators and placed in receivership, following a run on deposits triggered by the collapse of Silicon Valley Bank days earlierDimon said storm clouds are still threatening the economy, and the banking system is under renewed stress after the failure of Silicon Valley Bank and Credit Suisse’s rescue by UBS last month.’The market’s odds of a recession have increased,’ Dimon wrote.

‘And while this is nothing like 2008, it is not clear when this current crisis will end.’ ‘It has provoked lots of jitters in the market and will clearly cause some tightening of financial conditions as banks and other lenders become more conservative,’ he added.Even so, it is unclear whether the disruptions will slow the consumer spending that powers the US economy, Dimon wrote.