Silvergate lays off president, director resigns after move to liquidate bank
Silvergate Capital Corp.
on Monday said that President Ben Reynolds was laid off in connection with the decision to wind down operations at its subsidiary, Silvergate Bank, a crypto-friendly institution that got caught up in last year’s digital-asset meltdown.
The company, in a filing, said Reynolds was laid off on Monday. The filing said he would get certain severance benefits but would “not be entitled to any further compensation under his former employment agreement.” Reynolds was promoted to president in November.
In that filing, Silvergate also said Mary-Margaret Henke told the company on March 14 that she was resigning from the boards of both Silvergate Capital and Silvergate Bank. Her decision took hold a day later.
Shares of Silvergate fell 1.8% after hours.
The company on Monday also said it had received a letter from the New York Stock Exchange notifying the company that it had breached the exchange’s listing standards after the bank failed to file its 2022 annual report in a timely manner.
The company said it received the letter on March 17, about a week after it said it intended to wind down operations and liquidate the bank. Silvergate on Monday said it needed more time to complete tasks related to filing the report — a 10-K form.
If Silvergate fails to file the late report and has any other delayed filings within six months of the due date, the exchange “may, in its sole discretion, allow the company’s securities to trade for up to an additional six months depending on specific circumstances.” If the exchange decides that six-month window isn’t appropriate, “suspension and delisting procedures will commence,” Silvergate said.
As crypto prices crashed last year, the crypto exchange FTX collapsed and more traders raced to the sidelines, Silvergate suffered from a big loss and a steep drop in deposits, selling securities to raise cash amid the outflow. Silvergate in January cut its staff by 40%. Crypto exchange Coinbase Global Inc.
and financial-services firm Galaxy Digital, among others, cut ties with Silvergate later on.
The company earlier this month said it would be unable to make a timely filing of the 10-K form. Silvergate, at that time, said it needed more time to complete an evaluation over its financial reporting protocols, and to allow its accounting firm to finish some audits. It also warned that it could end up “less than well-capitalized,” and said it “evaluating the impact that these subsequent events have on its ability to continue as a going concern.”
Silvergate shares have plunged 98.8% over the past 12 months. By comparison, the S&P 500 Index
has fallen 11.4%.
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