Goldman Sachs’ work for Silicon Valley Bank is being reviewed as part of government investigations into the tech-focused bank’s collapse in March, the Wall Street bank disclosed on Thursday.
Goldman has been criticised for its dual role with SVB, both as a buyer of $21bn in securities sold by the California-based lender and as an adviser on a failed equity raise for the bank days before SVB failed.
The bank said it was co-operating with and providing information to “various governmental bodies” in connection with investigations and inquiries into SVB, in a filing with the Securities and Exchange Commission. This included Goldman’s “business with SVB in or around March 2023, when SVB engaged the firm to assist with a proposed capital raise and SVB sold the firm a portfolio of securities”.
In the days after SVB’s collapse, top congressional Democrats called for a federal investigation into Goldman’s role and urged regulators to examine whether the investment bank’s profits handling the $21bn trade for SVB should be repossessed.
The examination of Goldman’s role highlights the continuing postmortem into the sudden collapse of SVB, at the time the second-largest US bank failure ever, with US prosecutors and the SEC investigating the failure since March.
In addition to the government investigations in SVB, Goldman is among the underwriters named as defendants in a class-action lawsuit filed by investors who alleged that several stock and debt offerings by SVB in 2021 and 2022 “contained material misstatements and omissions”.
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