Insiders in failed Signature Bank sold $100 million in stock: report

Signature Bank insiders sold a total of more than $100 million of company stock in the past three years, after the company began attracting cryptocurrency clients, the Wall Street Journal reported.

Chairman Scott Shay, Chief Executive Officer Joseph DePaolo and Chief Operating Officer Eric Howell accounted for about half of the total, the newspaper said, citing its own analysis of company filings. They sold many of the shares in 2021 at around $220, before the stock hit an all-time high of $366 in early 2022, according to the report.

New York regulators shut down Signature Bank, citing a "crisis of confidence" in the management team and a run on deposits, and handed the company over to the Federal Deposit Insurance Corp. New York Community Bancorp Inc. later took over Signature Bank's deposits and some of its loans.


Shay, who was chairman of the board's risk committee, sold $5.4 million of stock in 2021. He also purchased $1.5 million from 2020 to 2022, and an additional $644,000 in 2023, according to the report. DePaolo sold $13.9 million shares in 2021 and Howell sold $14.9 million. The two sold an additional $9.2 million between them in March 2022, according to the report.

The Wall Street Journal said Signature Bank didn't respond to a request for comment, and New York Community Bancorp's Flagstar Bank, which will assume all of Signature Bank's cash deposits, didn't comment. Howell, Shay and DePaolo declined to comment to the newspaper.

A representative for Howell declined to comment when contacted by Bloomberg News. Shay and DePaolo couldn't immediately be reached for comment. The three executives suffered big losses on their shareholdings when the bank collapsed, according to the newspaper.

Signature filed the documents disclosing the sales to the FDIC, rather than the Securities and Exchange Commission, where companies of its size typically file, the Wall Street Journal said.