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SVB Collapse, Goldman Case Closes, and Uncertainty Ahead

SVB Collapse, Goldman Case Closes, and Uncertainty Ahead

"SVB’s situation epitomizes the popping of the second tech bubble and will have broad ramifications across the technology, startup, and VC space"

Robert Baron
March 10, 2023

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Banking News

Silicon Valley Bank Taken Over By Regulators

Venture Capital firms aren’t trusting reassurance from just-shuttered Silicon Valley Bank CEO Greg Becker. In two days, SVB lost almost $2B on mortgage-backed securities and U.S. treasuries sales, its stock fell 68%, and clients began to withdraw their deposits. Friday morning led to a closure by CA’s Dept. of Financial Protection and Innovation.

Gartner advisor Giorgio Daher says the failure is emblematic of hard times in the tech world:

SVB’s situation epitomizes the popping of the second tech bubble and will have broad ramifications across the technology, startup, and VC space.

Giorgio Daher

Ex-Goldman Fraudster Sentenced to 10 Years

The former head of Goldman Sachs’ Malaysian investment banking arm, Roger Ng, was sentenced to 10 years in prison for laundering funds and bribery of over $1.6B. His con netted him $35M personally, which he used to buy mansions, jewelry, and fund the film “The Wolf of Wall Street.” One of his two co-conspirators is at large. The other, Tim Leissner, awaits sentencing after pleading guilty in 2018.

Credit Union News

Behind-the-times Tech Hurts Black CUs

Online and mobile banking services are less common among currently declining Black-owned banking institutions. Modern banking customers consider online/mobile services a requisite before opening accounts, a move that could hurt Black-owned institutions that have yet to update. According to a study, about 80% of non-Black credit unions have websites and online banking, compared to 50% of Black-owned credit unions.

$109.6M to Be Returned To Capital Shareholders

Membership and shareholders in the former U.S. Central and Constitution CUs will receive monies in the sixth-such distribution of funds since the financial crisis in 2008. Returns are authorized by the National Credit Union Administration (NCUA), which created the Corporate System Resolution Program to deal with the 2008 failures of the U.S. Central and Constitution CUs, among others.

Todd Harper, an NCUA Chairman, said:

[This] is another example of the NCUA fulfilling its fiduciary responsibility to return additional funds to capital holders… Recipients should use these funds to support the millions of credit union members experiencing economic hardships due to rising interest rates.

Todd Harper

Financial Services & Blockchain

HMBradley Finds Bank to Accommodate Rapid Growth

The savings-focused neobank HMBradley will eliminate the waitlist it instituted after its former bank partner, Hatch Bank, couldn’t accommodate a flood of new accounts. The partnership with New York Community Bank, worth $87B, will take 25,000 customers off of the waitlist.

Zach Bruhnke, HMBradley’s CEO and Co-Founder, said:

We’re excited to be able to open the doors again and not be worried about being limited.

Zach Bruhnke

Finance Firms Have Most Flexible Work Environments

According to a survey of over 4,000 companies, almost 40% of financial companies have fully remote teams. That’s much higher than other industries, where the average is just over 30%. Only 20% of finance companies required full-time, in-person work, far less than almost 50% of companies in other industries. The results are positive since many financial services employees have more opportunities to select hybrid and remote options.