Earlier this summer, Silvergate Bank was required to submit a detailed liquidation plan following its liquidity crisis caused by the collapse of FTX and other internal issues.
The company’s situation has worsened since then, and now some of its highest-ranked officials stepped down.
Silvergate Bank was ordered to submit a plan that would prevent executives from leaving the firm with golden parachutes, ensuring as much liquidity as possible would be provided to legitimate customers of the company.
“The Federal Reserve’s order ensures Silvergate will implement its previously announced plan for winding down the bank’s operations in a manner that protects the bank’s depositors and the Deposit Insurance Fund. Silvergate is also prohibited from making capital distributions, dissipating cash assets, and engaging in certain other activities without regulatory approval.”
In accordance with the plan, Silvergate submitted notice to the SEC today, stating that CEO Alan J. Lane and John M. Bonino, the Chief Legal Officer of the company, had resigned effective immediately on the 15th of August.
Although the two executives would be receiving severance packages, they would not be receiving “any further compensation related to their employment.” The exact details of the severance packages were not revealed to the public.
Antonio Martino, Silvergate’s Chief Financial Officer, will also be leaving the company. However, his official resignation will be tendered on the 30th of September, owing to active duties still needing his attention.
According to the document, Lane’s position as CEO will be taken over by Chief Transition Officer Kathleen M. Fraher, who will continue to serve as CTO simultaneously. Once Martino steps down, his duties will be taken over by Chief Accounting Officer Andrew Surry.
However, the newly appointed executives will most likely be the last to hold their respective positions, as no further appointments are foreseen due to the bank’s upcoming liquidation.
Until the liquidation is resolved, Silvergate must address several high-profile lawsuits, such as the one filed by the Texan Word of God Fellowship Church, which accused it of using $25 million worth of church deposits for FTX’s benefit.
According to the lawsuit, the Church demands its deposit back, as well as any profit that Silvergate may have accrued from illegally aiding, abetting, and profiting off of FTX’s schemes. A class-action lawsuit caused by Silvergate’s alleged failure to do due diligence when onboarding clients such as FTX is also underway.