Progressive Senator Elizabeth Warren wants Goldman Sachs to name employees involved in its dealings with Silicon Valley Bank ahead of the financial institution’s failure and disclose whether they communicated with each other.
(Bloomberg) — Progressive Senator Elizabeth Warren wants Goldman Sachs to name employees involved in its dealings with Silicon Valley Bank ahead of the financial institution’s failure and disclose whether they communicated with each other.
Warren’s requests, made in a letter dated Monday, ratchets up congressional scrutiny of the dual roles Goldman played in the days leading up to SVB’s failure, as its investment bankers advised the company on raising capital and its trading division purchased a $24 billion loan portfolio from the bank at a discount. Warren is a member of the Senate Banking Committee.
Justice Department officials and investigators for the Securities and Exchange Commission also have queried Goldman about its role in SVB’s attempts to raise funds, according to a person familiar with the matter. Those queries are part of a broader review of the failed bank’s final days. SVB was taken over by the Federal Deposit Insurance Corporation, triggering a banking crisis that also toppled Signature Bank and First Republic.
Read More: Warren Asks Goldman Sachs to Detail Profits in Collapse of SVB
Warren, a Massachusetts Democrat, asked that Goldman name individual employees involved in advising SVB on its attempt to raise capital, the employees involved in the debt purchase, and whether they communicated during the weeks before SVB’s failure.
Warren said Goldman expects to make a profit of about $60 million on the purchase and subsequent sales of the SVB debt portfolio, citing an estimate Goldman provided her last month.
Goldman spokeswoman Sophia Anthony said in an emailed statement that the banks clients often request multiple financial services and that it has procedures to address potential conflicts of interest. Anthony said Goldman informed SVB in writing it was not acting as an adviser on the portfolio sale and that SVB should seek guidance from a third party.
The Wall Street Journal previously reported Warren’s letter.
–With assistance from Sridhar Natarajan.
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