(MENAFN- Kuwait News Agency (KUNA)) WASHINGTON, March 17 (KUNA) -- SVB Financial Group, the company that owned the failed Silicon Valley Bank until the US government took it over last week, has filed for Chapter 11 bankruptcy protection.
Silicon Valley Bank was not included in the bankruptcy filing in New York on Friday, CNN reported Friday.
Also it was not included in the Chapter 11 process are venture capital company SVB Capital and broker-dealer business SVB Securities, which will remain operational, it added.
'The Chapter 11 process will allow SVB Financial Group to preserve value as it evaluates strategic alternatives for its prized businesses and assets, especially SVB Capital and SVB Securities,' William Kosturos, chief restructuring officer for SVB Financial Group, said in a statement
'SVB Capital and SVB Securities continue to operate and serve clients, led by their longstanding and independent leadership teams,' he added.
Chapter 11 is the section of the bankruptcy code that allows businesses to reorganize their debts and typically involves large sums of money.
SVB Financial said it had USD 3.3 billion in unsecured debt and USD 3.7 billion in stock that could get wiped out in the bankruptcy.
Meanwhile, US President Joe Biden urges Congressional Action to strengthen accountability for senior bank executives.
Already, key executives that ran Silicon Valley Bank and Signature Bank - the two banks now under Federal Deposit Insurance Corporation (FDIC) receivership - have been removed, and investors in these two banks will take losses.
The President is calling on Congress to expand the FDIC's authority to claw back compensation - including gains from stock sales - from executives at failed banks like Silicon Valley Bank and Signature Bank.
'No one is above the law - and strengthening accountability is an important deterrent to prevent mismanagement in the future,' Biden said in a statement.
'The law limits the administration's authority to hold executives responsible. When banks fail due to mismanagement and excessive risk taking, it should be easier for regulators to claw back compensation from executives, to impose civil penalties, and to ban executives from working in the banking industry again.
'Congress must act to impose tougher penalties for senior bank executives whose mismanagement contributed to their institutions failing,' he noted.
The FDIC, the Securities and Exchange Commission, and the Department of Justice have regulatory authority to investigate the circumstances leading up to these banks entering receivership, and to take action against the management of these banks as appropriate. (end)
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