by Pam Martens and Russ Martens at Wall Street on Parade
A very peculiar headline appeared at Bloomberg News yesterday concerning the collapsing federally-insured bank, Silvergate Bank, which became the go-to financial institution over the past few years for crypto exchanges around the globe. The headline read: “Silvergate Is in Talks With FDIC Officials on Ways to Salvage Bank.” That headline moved quickly to other news outlets, which dutifully regurgitated that there was an effort underfoot by the Federal Deposit Insurance Corporation to save Silvergate Bank.
Bloomberg News then went further out on a shaky limb with this paragraph:
“Federal Deposit Insurance Corp. officials have been discussing with management ways to avoid a shutdown, according to people familiar with the matter. One possible option involves lining up crypto-industry investors to help Silvergate shore up its liquidity, said one of the people. FDIC examiners arrived at the firm’s La Jolla, California, offices last week, the people said.”
For starters, “FDIC examiners” are not investment bankers from Goldman Sachs or Perella Weinberg Partners. They don’t arrange mergers and acquisitions. If bank examiners from the Federal Deposit Insurance Corporation are on the premises of Silvergate Bank, it is because officials of that bank put a big red target on their bank for the Feds on March 1 when it made a filing with the Securities and Exchange Commission that stated that the bank had concerns about its “ability to continue as a going concern.”
The SEC filing also indicated that record-keeping at the bank is so suspect that it can’t even file its annual report for the full year of 2022 (Form 10-K) on time; and it needs more time to “record journal entries.” Equally troubling was the phrase that “its independent registered public accounting firm” will require more time “to complete certain audit procedures, including review of adjustments not yet recorded and the evaluation of the effectiveness of the Company’s internal control over financial reporting.”
And if all that weren’t enough,…Continue Reading