Sen. Elizabeth Warren of Massachusetts and Rep. Alexandria Ocasio-Cortez of New York sent letters to a handful of depositors with Silicon Valley Bank seeking details about their relationship with the failed bank.
The letters — sent out Sunday — went to 14 of the bank’s biggest depositors. Among other issues, they seek answers on how long the firms banked with SVB, why they decided to keep their deposits there and what other “benefits” — such as low-interest mortgages — board members and executives may have received from the bank.
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“In particular, we are interested in reports describing SVB’s ‘coddling’ and ‘white glove’ treatment of some of its largest venture capitalist (VC) depositors, their executives, and the founders of the tech startup companies they back, and the extent to which ‘SVB’s willingness to pull out ‘all sorts of bells and whistles’ for VCs and founders was one of the key ways it differentiated itself,’” the letter reads.
The letter also states that it is part of an effort “to understand the mutual backscratching dynamic that resulted in favorable treatment for VCs and startups, and massive, uninsured deposits into SVB,” and asks for answers to its questions by April 24.
The letters
The 14 firms that received letters are Circle, bill, BlockFi, Eiger, Ginkgo Bioworks, iRhythm Technologies, Lending Club, Oncorus, Payoneer Global, Protagonist Therapeutics, Roblox, Rocket Lab, Roku and Sangamo Therapeutics.
Both Warren and Ocasio-Cortez have been critical of the bank and its executives since the collapse.
Late last month, First Citizens BancShares agreed to buy $72 billion worth of assets of the failed Silicon Valley Bank.
SVB’s collapse was the biggest US bank failure in more than a decade. SVB was the dominant bank for tech startups and venture debt in the U.S., cultivating a reputation for close-knit relationships with the power brokers of venture and taking chances on young startups that most banks wouldn’t have the time of day for.
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- Source: https://news.crunchbase.com/venture/warren-aoc-silicon-valley-bank-letters/
