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Crisis-Hit SVB CEO Criticized for Fleeing to $3.1 Million Maui Townhouse

by Indrajeet Giram
March 17, 2023
in Markets
Reading Time: 2 mins read
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Crisis-Hit SVB CEO Criticized for Fleeing to $3.1 Million Maui Townhouse

Crisis-Hit SVB CEO Criticized for Fleeing to $3.1 Million Maui Townhouse

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Silicon Valley Bank’s CEO, Greg Becker, has come under scrutiny for his actions leading up to the bank’s collapse, which was triggered by a sudden run on deposits.

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According to reports by CNBC, Becker sold over $3 million worth of SVB shares just days before the bank disclosed its significant losses. This has raised questions about his motives and whether he had any prior knowledge of the bank’s financial difficulties.

Crisis-Hit SVB CEO Criticized for Fleeing to $3.1 Million Maui Townhouse
source : Fnypost.com

Moreover, it has been revealed that Becker has sold close to $30 million in the bank’s shares over the past two years. This significant divestment of his own holdings may indicate a lack of confidence in the bank’s long-term prospects, which is concerning given his position as CEO.

Adding to the controversy, the Daily Mail reported that Becker and his wife were photographed in Maui, where they reportedly own a townhouse worth $3.1 million, after taking a first-class flight to Hawaii amidst the bank’s troubles.

This has sparked criticism of Becker’s leadership and his priorities during this critical time for the bank.

Impact of SVB’s collapse on the banking industry

SVB’s collapse is a significant blow to the startup community, as the bank was a major lender in this space. Forbes magazine had previously reported a “significant” impact on the bank’s business due to remote work nearly a month before its downfall, indicating that SVB may have been struggling prior to the run on deposits.

According to The Financial Times, even top executives of Silicon Valley Bank (SVB) were operating remotely, with Greg Becker working from Hawaii on occasion and SVB President Mike Descheneaux joining in from Florida.

SVB has been operating since 1983 and specializes in lending to early-stage technology and biotech startups, as well as managing funds for venture capitalists.

Crisis-Hit SVB CEO Criticized for Fleeing to $3.1 Million Maui Townhouse
source : geekwire.com

Despite enjoying success during the era of easy monetary policy, the bank began to experience trouble when central banks around the world began tightening monetary policies due to inflation caused by the Russia-Ukraine war. As a result, the bank’s creditors have formed a group in anticipation of SVB’s possible bankruptcy, as reported by Reuters.

However, SVB has stated that it has brought on a restructuring expert and is not planning to file for bankruptcy. It is worth noting that from India alone, startups have an estimated $1 billion worth of deposits with SVB.

The move to remote work by top executives at SVB highlights the impact of the COVID-19 pandemic on the banking industry. The difficulties faced by SVB due to tightening monetary policies and the Russia-Ukraine war demonstrate the ripple effects of global events on financial institutions.

Tags: Banking sectorBusinessfundingGreg BeckerInvestmentLossesMarketssvb bankSVB_Collapse
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