The US Department of Justice (DOJ) has opened an investigation into the collapse of Silicon Valley Bank (SVB) last week after customers rushed to withdraw their deposits, US media reported Tuesday.
The probe into the swift demise of the Californian lender is in its early stages, according to reports from the New York Times, Washington Post and the Wall Street Journal.
The Journal, which broke the news of the DOJ's investigation, also reported that the US Securities and Exchange Commission (SEC) has launched an investigation, while the Times reported that they were considering doing so.
Both agencies declined to comment on the reports.
SVB's collapse triggered wider concern in the financial markets, with two more banks collapsing amid a squeeze on regional lenders.
The bank's decision to invest its high-tech customers' deposits in long-dated, low-yield bonds left it over-exposed to interest-rate risk when the Federal Reserve began hiking its benchmark last year.
When the era of historically low interest-rates came to an end, high-tech funding dried up, and SVB's customers began withdrawing their money to pay their bills. This left the bank with no option but to realize its losses on those bonds, sparking a bank run among concerned depositors.
In a statement released last night, SEC Chairman Gary Gensler said the agency is "particularly focused on monitoring for market stability and identifying and prosecuting any form of misconduct that might threaten investors, capital formation, or the markets more broadly."
"We will investigate and bring enforcement actions if we find violations of the federal securities laws," he added, without mentioning any companies by name.
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