Recent reports reveal that insiders at Signature Bank have sold over $100 million worth of company stock over the past three years. According to the Wall Street Journal, this selling spree began after the bank attracted cryptocurrency clients.
The Chairman, Scott Shay, CEO Joseph DePaolo, and COO Eric Howell were responsible for about half of the total amount sold, says the Journal, citing their analysis of company filings. They sold many shares in 2021 at around $220, just before the stock reached its all-time high of $366 in early 2022.
However, things worsened when New York regulators shut down Signature Bank, citing a “crisis of confidence” in the management team and a run on deposits. The bank was then handed over to the Federal Deposit Insurance Corp. New York Community Bancorp Inc. later took over Signature Bank’s deposits and some of its loans.
This news will undoubtedly raise questions and concerns among investors and customers of Signature Bank. It is important to note that while insider selling is not necessarily illegal, it can be seen as a lack of confidence in the company’s prospects.
The chairman of Signature Bank alone sold $5.4 million worth of stock in 2021
Recently, it has come to light that some top officials of Signature Bank, a New York-based financial institution, have sold a significant amount of company stock. Shay, the board’s risk committee chairman, sold $5.4 million worth of Signature Bank’s store in 2021. According to a report, he bought $1.5 million of stock between 2020 and 2022 and another $644,000 in 2023.
Moreover, DePaolo and Howell, also high-ranking officials at the bank, have sold a substantial amount of stock. DePaolo reportedly sold shares worth $13.9 million in 2021, while Howell sold shares worth $14.9 million. In March 2022, the two pledged an additional $9.2 million worth of stock, per the report.
The report has raised concerns about whether these sales reflect the officials need for more confidence in the bank’s prospects. Such large-scale selling of shares can harm the bank’s reputation and investor confidence.
It is worth noting that Signature Bank did not respond to a request for comment from the Wall Street Journal, which broke the story. New York Community Bancorp’s Flagstar Bank, set to take over all of Signature Bank’s cash deposits, also chose to refrain from commenting. Additionally, when approached by the Wall Street Journal, Shay, DePaolo, and Howell declined to make a statement.
Documents disclosing the sales to the Federal Deposit Insurance Corporation were filed
This situation highlights the importance of transparency and accountability in the banking industry. Shareholders and the public have a right to know about the actions of top officials in financial institutions, especially when it comes to the large-scale selling of shares.
A news panel reached out to representatives for Howell and Shay, but they declined to comment on the matter. DePaolo couldn’t be reached for comment immediately. It has been reported that these three executives had incurred significant losses on their shareholdings when the bank collapsed.
In addition, Signature Bank reportedly filed documents disclosing the sales to the Federal Deposit Insurance Corporation (FDIC) instead of the Securities and Exchange Commission (SEC), the typical regulatory body where companies of its size file such documents. This move has raised questions about the bank’s transparency and regulation compliance.