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(New York) The US Department of Justice has opened an investigation into the collapse of Silicon Valley Bank, which was taken over by federal regulators last Friday after its depositors rushed to withdraw their money from the bank, said two people with knowledge of the case.

The investigation is still in its early stages and it’s unclear what federal prosecutors are focusing on, one of those people said. A Justice Department spokesperson declined to comment.

Sales of company stock by several bank executives in the weeks leading up to the institution’s bankruptcy could be one of the potential targets of the investigation, according to several legal experts.

These sales have generated millions of dollars, although some bank executives have sold shares under insider selling plans that set the timing of these sales in advance.

For example, as part of a pre-arranged plan, former Silicon Valley Bank CEO Gregory Becker exercised options at the end of February that allowed him to sell shares worth about $3 million at a price of approximately US$287 per share; the sales were disclosed in a regulatory filing on March 1. The statement also said the share swap plan was put in place on January 26 when the bank’s shares closed at US$296.

Some politicians have said bank executives should return all the money they made from these stock sales.

Becker could not immediately be reached for comment. The investigation was first reported by the Wall Street Journal.

The Securities and Exchange Commission (SEC) has also opened an investigation led by the commission’s office in San Francisco, a person briefed on the matter said.

Andrew Calamari, attorney at Finn Dixon

The SEC did not respond to a request for comment. SEC Chairman Gary Gensler, however, issued a statement on Sunday in response to the difficulties experienced by the banking industry.

Silicon Valley Bank’s collapse was precipitated by a rush of customers who had so-called uninsured deposits – accounts that exceeded the US$250,000 limit of federally backed deposit insurance – and attempted to withdraw these funds.

The Federal Deposit Insurance Corporation (FDIC) seized the bank on Friday and, two days later, Signature Bank, which faced a similar problem. The FDIC and Federal Reserve also said all depositors at both banks would be compensated, helping to prevent the banks’ corporate customers from being unable to pay their employees.

These bank failures have raised fears that depositors will withdraw their money from regional banks, which could destabilize the banking system. But action by federal regulators over the weekend appeared to allay some of those fears, pushing regional bank stocks higher on Tuesday.