Silvergate Capital’s Review by Wedbush

Wedbush analysts lowered their price target on Silvergate Capital Corporation (NYSE:SI) to $30 from $45 after they hosted an advisor call with Steve Gannon, former general counsel of Citizens Financial Group, for an update on Silvergate's risk of potential liability, damages, and/or enforcement action related to its dealings with FTX and Alameda Research.

On the positive side, the analysts noted that because the company is heavily regulated, it's likely that it has a robust compliance function and said it believes that an enforcement action or legal penalty, if any, stemming from this situation would be manageable and not crippling.

On the negative side, the analysts mentioned (1) it's unlikely the company would be an acquisition target in the near term until the issue of potential legal liability receives closure, and (2) if regulators determine that the company's compliance function was lacking, it could potentially lead to millions of increased expenses to further build out the company's compliance infrastructure.