In the years leading up to Signature Bank’s downfall, Executives and directors sold over $100 million in stock, The Wall Street Journal reported.
Bank insiders sold approximately $70 million in shares in 2021 alone, as the bank started to deal with crypto companies, the WSJ also stated. The industry helped drive a 68 percent increase in deposits that year, which resulted in a 140 percent rise in Signature Bank’s shares.
Both 2020 and 2022 had low insider sales, with banking executives and directors selling roughly $12 million and $19 million in shares, respectively, per the Journal.
The insider sales were not picked up, this is due to Signature Bank, unlike most other S&P 500 companies, filing their documents with the Federal Deposit Insurance Corporation as opposed to The Securities and Exchange Commission.
The bank’s chairman, chief executive officer and chief operating officer, all of whom were part of its risk committee in the last year, accounted for about half of the shares sold between 2020 and 2022.
Signature Bank Chairman Scott Shay sold $5.4 million in stock in 2021, the same year that CEO Joseph DePaolo also sold $13.9 million and chief operating officer Eric Howell sold $14.9 million in shares, the Journal reported. DePaolo and Howell sold another $9.2 million shares total in March 2022.
The bank collapsed and was taken over by federal regulators in March, not long after Silicon Valley Bank’s collapse. The fall of Silicon Valley Bank and Signature Bank represented the second- and third-largest bank failures in U.S. history.
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