Short seller warned US regulator about Signature Bank in January

Short seller Marc Cohodes warned FDIC officials in January that Signature Bank lacked controls. Signature's failure raises questions about risk and regulatory oversight in banking and cryptocurrency.

March 22, 2023 . 11:17 AM

1 min read

Short seller Marc Cohodes warned FDIC officials in mid-January that Signature Bank lacked basic controls.
Signature Bank made a $370,000 pandemic assistance loan to Alameda Research, the hedge fund affiliate of the crypto exchange FTX that last year filed for bankruptcy protection and was alleged to be part of a fraud.
Signature Bank had a reputation for promoting entrepreneurial bankers and a blind spot for risk.
Most of Signature Bank's remaining deposits and about a third of its assets were acquired by a unit of New York Community Bancorp in a deal arranged by the FDIC.
Signature's deposits had sunk by nearly 60% since the beginning of 2023 and its failure is estimated to cost the FDIC insurance fund $2.5bn.