"Better late than never"! The Fed and SEC are jointly investigating what Goldman Sachs did in the "fatal" Silicon Valley Bank transaction.

The "aftershocks" of the SVB Financial collapse are still ongoing, and US regulators are launching a joint investigation into Goldman Sachs.

According to sources cited by the Wall Street Journal on Thursday, the Federal Reserve and the US Securities and Exchange Commission (SEC) are investigating Goldman Sachs' role in the SVB Financial collapse, including its role as both a buyer of SVB's securities portfolio and its capital-raising advisor. As part of the investigation, the US Department of Justice has subpoenaed Goldman Sachs.

Sources said that the Federal Reserve and SEC are seeking some documentary evidence related to Goldman Sachs' role as both a buyer of SVB's securities portfolio and its capital-raising advisor. They are investigating whether Goldman Sachs' investment banking and trading departments improperly communicated on the sale of SVB's securities portfolio.

In this major crisis, SVB hired Goldman Sachs to help raise funds, while Goldman Sachs' trading department bought SVB's AFS securities portfolio at a price below market value. Craig Coben, former global head of equity capital markets at Bank of America, said that for bond trading, SVB is Goldman Sachs' market trading partner, while for stock issuance, it is Goldman Sachs' client.

As previously mentioned, Goldman Sachs' traders and investment bankers happened to be working for SVB at the same time, but there was a wall between them and they didn't know what the other was doing.

This "dual role" has aroused the suspicion of regulators. Bankers and bank lawyers have said that banks rarely serve as both advisers to a company and buyers of its assets, unless it is during a financial crisis. Goldman Sachs previously announced in May that "various government agencies" were investigating and questioning its role in the failed capital increase and securities sales at SVB.

Sources said that Goldman Sachs told SVB executives that if they wanted to raise funds, SVB had to sell some or all of its securities portfolio to show their need for funds. SVB's former CEO, Greg Becker, expressed the same view to the Senate Banking Committee in May of this year.

Both sides were worried that SVB's problems would be exposed to the public. Sources also said that SVB executives decided not to publicly sell the securities portfolio because they were afraid the market would know they were in trouble.

A Goldman Sachs spokesperson reiterated that Goldman Sachs assisted SVB in the proposed financing and subsequently purchased a group of securities from them. Prior to the transaction, Goldman Sachs informed SVB in writing that it would not act as their sales advisor and that SVB should not rely on any advice from the bank in this regard, but should hire a third-party financial advisor.

On March 8, SVB announced that it had lost $1.8 billion in the process of selling its debt securities and announced that it would raise funds by selling stocks. After SVB publicly disclosed its loss information and other negative news (including Moody's rating downgrade), its stock price fell sharply and depositors began to withdraw their deposits. Goldman Sachs spokesperson said that after purchasing SVB's securities portfolio in March, Goldman Sachs began to gradually sell these securities. In early May, the bank stated that it expected to earn less than $50 million in revenue after selling the entire investment portfolio.