Hi ,
From time to time there is news in the banking and finance community that we think is important for our clients to be aware of, and the events of the past few days revolving around Silicon Valley Bank (SVB) are one of them.
What Happened to Silicon Valley Bank?
Silicon Valley Bank announced its latest earnings on March 8, 2023, and revealed that it had suffered from a slowdown in venture capital funding, declining customer deposit volume, and losses on investments it made when rates were at lower levels. As a result, it was going to sell off assets to meet the demand for customer withdrawals. This news set off fear in the tech industry, as start-ups rushed to get their money out of the bank.
These concerns became self-fulfilling and fueled what is known as a bank run, which occurs when many customers withdraw their funds from a financial institution out of fear that the bank may fail.
On Friday, March 10, 2023, the California Department of Financial Protection and Innovation (DFPI) revoked SVB’s bank charter and transferred the business into receivership under the Federal Deposit Insurance Corporation (FDIC). On Sunday, March 12, 2023, US regulators said Silicon Valley Bank depositors would be fully repaid, above the FDIC insurance threshold of $250,000.*
Longhouse Wealth Management Clients Remain Protected
Longhouse operations weren’t impacted by the SVB collapse, and our goal hasn't changed: to provide you with the safest, best possible investment services by putting "People over Profit".
Our business is well capitalized; all client securities and cash in brokerage accounts held at Interactive Brokers LLC (IBKR) are protected by the Securities Investor Protection Corporation ("SIPC").
To further protect your account from loss due to the failure of a broker/dealer, IBKR has purchased additional SIPC insurance from Lloyd's of London to increase the dollar amount of cash and securities covered in each of your accounts up to:**
- Cash Coverage = $1,150,000
- Securities Coverage = $30,000,000
You can rest easy knowing that we are watching over your money in these temporary, turbulent times. If anything were to happen to IBKR, your account balances would be fully covered by insurance.
Next Steps
Do you know someone directly affected by this that needs a better adviser or has a lot of money just sitting in the bank (only covered by $250,000 of FDIC insurance)?
Have them call us at (760) 642-1100 so we can help them protect their money/retirement savings.
Or send them this link to open an account with us today: https://www.longhousewm.com/open-new-account
Regards,
Dean, John & the Team at Longhouse
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Want to learn more?
Read our Business Continuity Plan here
Log in to your IBKR account here
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