Signature Bank investigated for money laundering before his death: report

The cryptocurrency-enabled Signature Bank was reportedly investigated by two United States government agencies before its collapse.

According to a March 15 Bloomberg report citing people familiar with the matter, Justice Department investigators were examining whether Signature had taken adequate steps to detect possible money laundering by its clients.

It was noted that the regulator was particularly concerned about whether the bank was taking preventive measures to monitor transactions for “signs of criminality” and to properly vet account holders.

A separate investigation by the Securities and Exchange Commission has also “taken a look” at the bank, according to two unnamed sources cited by Bloomberg. Details regarding the nature of the SEC’s investigation were not reported.

It’s unclear when the investigations began and what effect, if any, they had on New York state regulators’ recent decision to close the bank.

It is reported that Signature and its staff are not charged with any wrongdoing and that the investigations could be finalized without any charges or further action by the SEC or the Department of Justice (DOJ).

The report follows a March 14 class action lawsuit filed by Signature shareholders against the bank and former executives for claiming to be “financially strong,” just three days before it was forced to close.

Former Signature Bank board member Barney Frank said on March 13 that regulators wanted to “send a very strong anti-crypto message.”

Frank added that the crypto-friendly bank became the “poster boy” because there was “no fundamental-based insolvency.”

Related: Gemini says no fund at Signature Bank backs GUSD

Signature, which closed on March 12, was part of a series of bank closures that also included Silvergate Capital and Silicon Valley Bank (SVB).

The DOJ and SEC have since reportedly opened separate investigations into the collapse of Silvergate Capital and SVB.

It has been reported that regulators will look into the events that led to the bank’s collapse, including reviewing security documents that revealed the sale of SVB shares by company CEO Greg Becker and CFO Daniel Beck which took place two weeks before his fall.

The SEC has not officially commented on these matters, but SEC Chairman Gary Gensler said on March 12 that it “will investigate and take enforcement action if we find violations of federal securities laws. “.

Leave a Comment