United States Senate Report Highlights KPMG Awareness of 3 Failed Banks Problems (Silicon Valley Bank, Signature Bank & First Republic Bank) Before Their Collapse in 2023 But Had Issued Clean Audits Before the 3 Banks Failures
19th September | Hong Kong
United States Senate has released a report highlighting KPMG awareness of 3 failed banks problems (Silicon Valley Bank, Signature Bank & First Republic Bank) before their collapse in 2023, but had issued clean audits before the 3 banks failures. Announcement (17/9/25): “U.S. Senator Richard Blumenthal (D-CT), Ranking Member of the U.S. Senate Permanent Subcommittee on Investigations (PSI), released a final Minority Staff Report today, marking the end of the Subcommittee’s probe into KPMG’s audits of three major American banks prior to their collapse. Today’s report concludes a 28-month long investigation into KPMG’s unqualified audits of Silicon Valley Bank, Signature Bank, and First Republic Bank, each of which the auditing firm had certified as representing their numbers fairly and accurately to the public, weeks, if not days before their collapse. Among its findings, PSI’s investigation revealed that KPMG had years-long awareness of the banks’ problems that precipitated each their eventual failures and had put depositors and investors at risk. Blumenthal: ““KPMG ignored the warning signs that Silicon Valley Bank, Signature Bank, and First Republic Bank were unstable—justifying their patterns of risky and questionable decisions to issue clean audits in the days leading up to their failures … … Our PSI report exposes KPMG’s willful blindness and stresses that significant reforms to the auditing industry are needed to promote transparency and better protect consumers.” In 2023, KPMG, Goldman Sachs, Morgan Stanley, Bank of America, Silicon Valley Bank CEO Greg Becker, Silicon Valley Bank directors & officers were sued (7th April 2023) for misrepresenting the strength of Silicon Valley Bank balance sheet, liquidity & risks. KPMG is being sued as the role as auditor and Goldman Sachs, Bank of America, Morgan Stanley and Keefe, Bruyette & Woods had been sued as underwriters. Before Silicon Valley Bank collapsed, the bank was raising $2.25 billion in capital with Goldman Sachs, Bank of America, Morgan Stanley and Keefe, Bruyette & Woods as underwriters. A few weeks before Silicon Valley Bank collapsed, KPMG as auditor had signed off Silicon Valley Bank 2022 annual report, without highlighting risks of Silicon Valley Bank declining deposits and debt securities valuation concerns. The filing was submitted on 7th April 2023. The case is City of Hialeah Employees Retirement System et al v. Becker, 23-cv-01697, US District Court for the Northern District of California ( San Francisco). Earlier in 2023 March, 18 defendants including Sequoia Capital, Softbank & Singapore Temasek received a class action lawsuit in United States (Miami, Florida) for allegedly conspiring with crypto exchange FTX, with the lawsuit claiming the defendants wielded power, influence & deep pockets to launch FTX house of cards into multi-billion scale. Read More: 18 Defendants Including Sequoia Capital, Softbank & Singapore Temasek Received Class Action Lawsuit in United States for Conspiring with Crypto Exchange FTX, Claims Defendants Wielded Power, Influence & Deep Pockets to Launch FTX House of Cards into Multi-Billion Scale. In 2024 February, the buyer of failed Signature Bank NYCB (New York Community Bancorp) share price had decreased -37% in 1 day (31/1/24) after cutting dividend and reported an increased in loan losses after acquiring $40 billion of assets in 2023 including $13 billion of loans from failed Signature Bank. NYCB (New York Community Bancorp) has a current market capitalization of $4.6 billion (31/1/24). In 2023 December, Private equity group Blackstone and Canada Pension Plan Investment Board (CPPIB) acquired 20% equity stake for $1.2 billion in new joint venture with United States FDIC (Federal Deposit Insurance Corporation) to hold $16.8 billion of senior mortgage loan portfolio from collapsed Signature Bank (United States). In 2023 March, The United States Department of the Treasury, Board of Governors of the Federal Reserve System (Fed) & Federal Deposit Insurance Corporation (FDIC) issued an official joint statement on the closure of Silicon Valley Bank & Signature Bank, with all depositors will have access to money (Monday 13/3/23), shareholders & unsecured debts are not protected, and no losses to be borne by taxpayers. In 2023 May, JP Morgan won the bid to buy majority of United States First Republic Bank for $10.6 billion after United States FDIC (Federal Deposit Insurance Corp) had seized First Republic Bank with $229 billion assets on 1st May 2023 (Monday). First Republic Bank is the 2nd largest bank failure since Washington Mutual failed with $307 billion assets in 2008. United States FDIC: “To protect depositors, the FDIC is entering into a purchase and assumption agreement with JPMorgan Chase Bank, National Association, Columbus, Ohio, to assume all of the deposits and substantially all of the assets of First Republic Bank.” JP Morgan key transaction details: 1) Acquisition of the substantial majority of First Republic Bank’s assets, including approximately $173 billion of loans and approximately $30 billion of securities. 2) Assumption of approximately $92 billion of deposits, including $30 billion of large bank deposits, which will be repaid post-close or eliminated in consolidation. 3) FDIC will provide loss share agreements covering acquired single-family residential mortgage loans and commercial loans, as well as $50 billion of five-year, fixed-rate term financing. 4) JPMorgan Chase is not assuming First Republic’s corporate debt or preferred stock. See below for JP Morgan & United States FDIC statement.
“ United States Senate Report Highlights KPMG Awareness of 3 Failed Banks Problems (Silicon Valley Bank, Signature Bank & First Republic Bank) Before Their Collapse in 2023 But Had Issued Clean Audits Before the 3 Banks Failures “
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United States Senate Report Highlights KPMG Awareness of 3 Failed Banks Problems (Silicon Valley Bank, Signature Bank & First Republic Bank) Before Their Collapse in 2023 But Had Issued Clean Audits Before the 3 Banks Failures
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