Signature execs sold $100 million in stock in three years pre-bailout

Executives and directors at Signature Bank sold more than $100 million in stock in the three years leading up to the bank’s collapse last month, according to The Wall Street Journal.

Bank insiders sold about $70 million in shares in 2021 alone, as the bank courted cryptocurrency companies, the Journal reported. The industry helped drive a 68 percent increase in deposits that year, resulting in a 140 percent rise in Signature Bank’s shares.

Both 2020 and 2022 saw relatively lower insider sales, with banking executives and directors selling about $12 million and $19 million in shares, respectively, per the Journal.

The insider sales went largely unnoticed because Signature Bank, unlike most other S&P 500 companies, filed documents with the Federal Deposit Insurance Corporation instead of the Securities and Exchange Commission.

The bank’s chairman, chief executive officer and chief operating officer — all of whom sat on the its risk committee in the last year — accounted for about half of the shares sold between 2020 and 2022.

Signature Bank Chairman Scott Shay sold $5.4 million in stock in 2021, the same year that CEO Joseph DePaolo also sold $13.9 million and chief operating officer Eric Howell sold $14.9 million in shares, the Journal reported. DePaolo and Howell sold another $9.2 million shares total in March 2022.

The bank collapsed and was taken over by federal regulators last month, in the wake of Silicon Valley Bank’s collapse. The fall of Silicon Valley Bank and Signature Bank represented the second- and third-largest bank failures in U.S. history.