Shares of Silvergate Capital fell 28% to $10 in early March after the financial institution announced a delay in its annual report. Silvergate Bank notified the U.S. Securities and Exchange Commission (SEC) late Wednesday that it would not be able to meet the March 16 extended deadline for filing annual results due to “processes to reassess its business and strategies.”
“The company sold additional debt securities in January and February 2023, expecting to lock in further losses related to the depreciation of the securities portfolio,” Silvergate said in a notice to the SEC.
In comments to the media, a spokesman for Silvergate said that the series of negative events that are plaguing the bank could significantly impair its ability to function. We are talking about the forced sale of blocks of securities, as well as financial and reputational losses caused by the start of an investigation into the company’s activities by the US Department of Justice. As of the end of last year, Silvergate’s debt could exceed $4.3 billion.
In December, a lawsuit was filed against Silvergate and CEO Alan Lane in the Southern District of California. The plaintiffs allege that the company directly facilitated the fraudulent activities of the FTX cryptocurrency exchange, and Silvergate clients used this organization to launder money on a large scale, while the bank’s management deliberately misrepresented information about business operations.
Significant financial problems of Silvergate confirm the position of the Moody’s rating agency, which downgraded the company’s rating to “B3” – which means a high degree of credit risk of the issuer.
Source: Bits

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