Silvergate Pays $63 Million to Settle US Regulators’ Probes

Bloomberg07-02

(Bloomberg) -- Silvergate, the California lender done in by the collapse of crypto exchange FTX, agreed to pay $63 million to settle state and federal probes on Monday. Most Read from Bloomberg ...

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Trump Immunity Ruling Means Any Trial Before Election Unlikely. 24-Hour Stock Trading Is Booming – and Wall Street Is Rattled. BlackRock Buys Preqin for $3.2 Billion in Private Data Push. The Federal Reserve announced the penalties against the bank, owned by Silvergate Capital Corp. The Fed portion of the fine is $43 million, and the California Department of Financial Protection and Innovation makes up the remainder. The Securities and Exchange Commission also said it settled with the lender.Silvergate didn’t admit to or deny claims made by the regulators.On Monday, the SEC said the lender would pay $50 million to settle claims of negligence-based fraud for misleading investors about its compliance. That amount could be offset by other penalties, according to the SEC.B","collect":0,"end_time":0,"defaultTopTitle":"yahoo.com","property":[],"viewcount":null,"language":"en","relate_stocks":{"SICP":"Silvergate Capital Corporation","BK4211":"区域性银行","SICPL":"Silvergate Capital Corporation"},"translate_title":"Silvergate支付6300万美元和解美国监管机构的调查","themeId":null,"isJumpTheme":false,"ttsUrl":null,"symbols_score_info":{"SICP":0.9,"SICPL":0.9,"US10Y.BOND":0.62,"US12M.BOND":0.62,"US2Y.BOND":0.62,"US30Y.BOND":0.62,"US3Y.BOND":0.62,"US5Y.BOND":0.62,"US6M.BOND":0.62,"US7Y.BOND":0.62,"US912797GB79.BOND":0.6,"US912797GK78.BOND":0.6,"US912797GL51.BOND":0.6,"US912797GW17.BOND":0.6,"US912797HE00.BOND":0.6},"content_text":"(Bloomberg) -- Silvergate, the California lender done in by the collapse of crypto exchange FTX, agreed to pay $63 million to settle state and federal probes on Monday.\nMost Read from Bloomberg\n\nDemocrats Weigh Mid-July Vote to Formally Tap Biden as Nominee\nTrump Immunity Ruling Means Any Trial Before Election Unlikely\n24-Hour Stock Trading Is Booming – and Wall Street Is Rattled\nBlackRock Buys Preqin for $3.2 Billion in Private Data Push\nTrump as President or Private Citizen: Why Supreme Court’s Immunity Ruling Is a Test\n\nThe Federal Reserve announced the penalties against the bank, owned by Silvergate Capital Corp. The Fed portion of the fine is $43 million, and the California Department of Financial Protection and Innovation makes up the remainder. The Securities and Exchange Commission also said it settled with the lender.  \nSilvergate didn’t admit to or deny claims made by the regulators.\n“The settlements announced today, which will facilitate the surrender of Silvergate’s bank charter, are part of the bank’s continued orderly wind-down and successfully conclude investigations by the Federal Reserve, DFPI and SEC,” the company said in a statement. The bank added that it “made a responsible decision to liquidate voluntarily and without government assistance” in 2023, and that all deposits had been repaid to banking customers. \nSEC Claim\nOn Monday, the SEC said the lender would pay $50 million to settle claims of negligence-based fraud for misleading investors about its compliance. That amount could be offset by other penalties, according to the SEC.\n“Because of those deficiencies, Silvergate allegedly failed to detect nearly $9 billion in suspicious transfers among FTX and its related entities,” Gurbir Grewal, the head of the SEC’s enforcement unit, said in a press release. \nThe markets regulator also settled with former Silvergate Chief Executive Officer Alan J. Lane and former Chief Operating Officer Kathleen Fraher for $1 million and $250,000, respectively. Attorneys for the two executives didn’t immediately respond to requests for comment.\nThe SEC’s complaint also alleged that Antonio Martino, the lender’s former chief financial officer, and the bank understated losses and misrepresented that it remained well-capitalized at the end of 2022.\nMartino denied the agency’s claims in an emailed statement. The SEC’s allegations concern a technical accounting treatment for one quarter in 2022 that is also highly subjective to business judgment, according to the statement.\n“Mr. Martino acted reasonably and in good faith throughout his time at Silvergate. He denies any wrongdoing and intends to challenge the SEC’s claims in court,” his attorney, Adam Lurie, a partner at Linklaters, said in the emailed statement.\nCrypto Clients\nBloomberg reported in February 2023 that the lender faced a criminal investigation from the Justice Department into its dealings with FTX and Sam Bankman-Fried, the exchange’s former chief executive officer. \nThe status of that probe isn’t known. Law enforcement officials at the agency previously said the bank was also a victim of large-scale fraud perpetrated by FTX and Bankman-Fried. \nAs one of the few traditional banks to embrace doing business with the then-nascent digital-asset industry, Silvergate became embroiled in the crypto industry’s meltdown in late 2022 and 2023. \nSilvergate had made a name for itself by operating one of the few payments systems that allowed investors and digital asset companies to convert US dollar deposits into digital assets, serving as a key infrastructure to digital-asset exchanges.\nThe collapse of the FTX exchange, once purported to be the world’s largest crypto trading platform, precipitated a liquidity crunch as Silvergate investors and clients rushed to sever ties with the La Jolla-based lender.\n(Updates with additional information on SEC settlements starting in the seventh paragraph. An earlier version corrected the spelling of the bank’s name in the headline.)\nMost Read from Bloomberg Businessweek\n\nThe Fried Chicken Sandwich Wars Are More Cutthroat Than Ever Before\nOnline Shopping Warehouses Are Reshaping Rural America\nJapan’s Tiny Kei-Trucks Have a Cult Following in the US, and Some States Are Pushing Back\nRTO Mandates Are Killing the Euphoric Work-Life Balance Some Moms Found\nThe FBI’s Star Cooperator May Have Been Running New Scams All Along\n\n©2024 Bloomberg L.P.","kind":"highlight","is_publish_news":true,"is_publish_highlight":false,"is_publish_live":false,"is_publish_wemedia":null,"editions":null,"column":"","sentiment":"0","news_tag":"","news_rank":0,"symbols":[],"gpt_button":1},"commentList":[],"isCommentEnd":true,"newsSizeData":{"likeSize":0,"commentSize":0,"repostSize":0,"favoriteSize":0,"likeStatus":false,"favoriteStatus":false},"APP":{"userAgent":"Mozilla/5.0 AppleWebKit/537.36 (KHTML, like Gecko; compatible; ClaudeBot/1.0; +claudebot@anthropic.com)","isDev":false,"isTTM":true,"deviceId":"web-server-community-laohu8-v3","version":"4.29.3","shortVersion":"4.29.3","platform":"web","vendor":"web","appName":"ttm","isIOS":false,"isAndroid":false,"isTiger":false,"isTHS":false,"isWeiXin":false,"isWeiXinMini":false,"isWeiBo":false,"isQQ":false,"isBaiduSwan":false,"isBaiduBox":false,"isDingTalk":false,"isToutiao":false,"isOnePlus":false,"isHuaWei":false,"isXiaomi":false,"isXiaomiWebView":false,"isOppo":false,"isVivo":false,"isSamsung":false,"isMobile":false},"href":"/m/news/2448921004"}