US prosecutors are looking into the Silicon Valley Bank’s demise

According to a source familiar with the situation, U.S. prosecutors are looking into the sudden demise of Silicon Valley Bank as regulators try to contain the fallout and scrutiny over the firm’s demise grows.

The source, who wished to remain anonymous because the investigation is private, said that the U.S. Justice Department is looking into the bank’s abrupt closure on Friday after a bank run. The Wall Street Journal, which broke the news of the investigations, reports that the Securities and Exchange Commission has begun a parallel investigation.

Justice Department, SEC, and SVB spokespeople all declined to comment.

According to the source, the investigation is still in its early stages and there may not be any accusations of wrongdoing or charges brought. The WSJ reported that officials are also looking into stock sales made by SVB Financial Group (SIVB.O) officers, who owned the bank. The report was based on people with knowledge of the situation.

The fallout from the collapse of Silicon Valley Bank is starting to spread around the world.

SVB’s UK unit is set to be declared insolvent, has already ceased trading, and is no longer taking new customers. Startup founders are panicking about accessing money and paying employees. On Saturday, the leaders of roughly 180 tech companies sent a letter calling on UK Chancellor Jeremy Hunt to intervene.

“The loss of deposits has the potential to cripple the sector and set the ecosystem back 20 years,” they said in the letter seen by Bloomberg. “Many businesses will be sent into involuntary liquidation overnight.”

In a statement released on Sunday, SEC Chair Gary Gensler said the organization is particularly focused on keeping an eye on market stability and identifying and prosecuting any wrongdoing that could endanger investors during times of turbulence.

Regulators are rushing to contain risks to the rest of the industry after the quick demise of Silicon Valley Bank and the collapse of Signature Bank. Rating agency Moody’s changed the outlook for the American banking system from “stable” to “negative” on Tuesday.

This week, shareholders filed a lawsuit against SVB Financial Group and two of its top executives, claiming they failed to disclose how rising interest rates would make its Silicon Valley Bank division vulnerable to a bank run.