WASHINGTON — Prime Democratic lawmakers pressed the Justice Division and the Securities and Trade Fee to open a probe into whether or not officers concerned within the failure of Silicon Valley Financial institution, the biggest financial institution collapse for the reason that 2008 monetary disaster, violated civil or legal legislation.

The letter, despatched Tuesday by Sens. Elizabeth Warren, D-Mass. and Richard Blumenthal, D-Conn., asks for a complete investigation into the Federal Deposit Insurance coverage Company’s takeover of the failing financial institution, together with “whether or not senior financial institution executives and different key officers concerned within the collapse met their statutory and regulatory duties or violated civil or legal legislation.”

“This was a colossal failure in asset legal responsibility danger administration,” the lawmakers wrote to SEC Chairman Gary Gensler and Lawyer Common Merrick Garland. “Nevertheless, a sequence of studies revealed that key SVB officers confirmed a sample of dangerous and questionable determination making which will have contributed to the financial institution’s instability and collapse and the ripple results being felt all through the financial system.”

The failure of SVB, which was the nation’s sixteenth largest financial institution, was preempted after it didn’t adequately hedge towards rising rates of interest. The corporate’s tipping level got here final Wednesday, when SVB introduced it had offered $21 billion price of its securities at a roughly $1.8 billion loss and stated it wanted to boost $2.25 billion to satisfy shoppers’ withdrawal wants and fund new lending. That information despatched its inventory worth plunging and triggered a panic-induced wave of withdrawals from VCs and different depositors. Inside a day, SVB inventory had tanked 60% and led to a lack of greater than $80 billion in financial institution shares globally.

California financial institution regulators shuttered SVB on Friday and the FDIC arrange an middleman financial institution to take over the financial institution’s insured deposits. By Sunday, New York state financial institution regulators and the FDIC did the identical to Signature Financial institution, which was a serious supply of lending for the cryptocurrency trade.

The letter got here on the heels of a joint announcement by the Justice Division and the SEC concerning the pending investigation into the SVB failure. The inquiry will happen in separate and preliminary phases and look into inventory gross sales that SVB executives carried out forward of the financial institution’s collapse.

“One of many enduring failures within the aftermath of the 2008 monetary disaster was the lack or unwillingness of DOJ and financial institution regulators to carry financial institution executives accountable for conduct that destroyed thousands and thousands of lives and price trillions of {dollars} of wealth,” Warren, a member of the Senate Banking Committee, and Blumenthal, who chairs the Everlasting Subcommittee on Investigations for the Senate Judiciary Committee, wrote. “The nation’s financial institution regulators can’t make the identical mistake twice.”

Warren and Blumenthal requested the companies to look into into whether or not SVB executives violated any self-dealing guidelines, disclosure necessities, fiduciary duties or insider buying and selling guidelines earlier than the collapse.

The lawmakers accused the executives of giving preferential remedy to the financial institution’s founders, together with low-interest mortgage loans and outsized pay and bonuses. Financial institution officers additionally lobbied Congress for exemptions to federal oversight laws.

SVB workers reportedly acquired annual bonuses on Friday — hours earlier than the financial institution was seized by the FDIC. Warren additionally wrote in a separate letter on Tuesday asking Federal Reserve Chair Jerome Powell to recuse himself from a probe into SVB’s enterprise practices that former financial institution CEO Gregory Becker satisfied lawmakers to absolve the financial institution from sure protections underneath the Dodd-Frank Act.

“I’m not prejudging this matter, and am not in place to take action,” the lawmakers wrote to Gensler and Garland. “However your companies have in depth investigative authority and may use it appropriately.”

CNBC’s Natasha Turak contributed to this text.