The Justice Department and the Security and Exchange Commission have launched federal investigations into what caused the collapse of Silicon Valley Bank. The probes will include a review of any stock sales by bank executives prior to the collapse. CNBC’s Brian Cheung provides insight for TODAY.

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The Department of Justice (DOJ) and Securities and Exchange Commission (SEC) have opened investigations into the causes of recent bank failures in the United States. These failures have led to significant losses for investors and raised concerns about the stability of the financial sector.

The investigations will focus on whether these banks engaged in fraudulent or illegal activities that led to their demise. This could include misleading investors, manipulating financial data, or engaging in other unethical practices. The DOJ and SEC are also likely to investigate the role of regulators in overseeing these banks and whether they adequately detected and addressed any issues before it was too late.

One of the most high-profile bank failures in recent years was that of Washington Mutual (WaMu), which was seized by regulators in 2008 and subsequently sold to JPMorgan Chase. The DOJ and SEC have reportedly subpoenaed records from JPMorgan Chase related to its acquisition of WaMu, and are looking into whether the bank engaged in any fraudulent or deceptive practices during the transaction.

Another bank under investigation is CIT Group, which filed for bankruptcy in 2009 after struggling to manage its debt. The DOJ and SEC are reportedly looking into whether CIT misled investors about its ability to manage its debt and whether it engaged in any illegal activities to try and bolster its financial position.

These investigations are part of a broader effort by regulators to strengthen oversight of the financial sector and prevent another financial crisis from occurring. The 2008 financial crisis highlighted numerous weaknesses in the regulatory system, including the failure to adequately monitor the activities of banks and other financial institutions.

By investigating the causes of bank failures, the DOJ and SEC can identify any systemic issues that need to be addressed and hold individuals and institutions accountable for any illegal or unethical behavior. This will help restore confidence in the financial sector and prevent future crises from occurring.

In summary, the DOJ and SEC are investigating the causes of recent bank failures in the United States. This is part of an effort to strengthen oversight of the financial sector and prevent another financial crisis from occurring. These investigations will focus on whether banks engaged in fraudulent or illegal activities and whether regulators adequately monitored their activities. Identifying and addressing any systemic issues will be crucial in restoring confidence in the financial sector and preventing future crises.