The Bank Slate


Silvergate, former CEO pay fines to settle claims they misled investors

Silvergate Capital in La Jolla, Calif., and its bank will pay $63 million in penalties to settle claims it misled shareholders about the strength of its Bank Secrecy Act and anti-money laundering compliance.

Silvergate was fined by the Federal Reserve and the California Department of Financial Protection and Innovation.

Separately, the Securities and Exchange Commission reached settlements with former Silvergate CEO Allan Lane, who agreed to pay a $1 million civil penalty, and Kathleen Fraher, former chief risk officer, who will pay $250,000. They each agreed to five-year officer-and-director bans.

Silvergate agreed to pay $50 million to settle SEC claims, though the payment may be offset by penalties paid to the Fed and the California state regulator.

The SEC also claimed that Antonio Martino, Silvergate’s former chief financial officer, misled shareholders about the company’s losses “from expected securities sales following FTX’s collapse.”

Martino’s lawyers wrote in a statement to Cointelegraph that the claims “are unfounded and irresponsible” and that the former CFO aims to clear his name.

Silvergate, which announced plans last year to voluntarily wind down its operations, has paid back all deposits to its customers, the Fed said.

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