EXCLUSIVE: SVB CEO Assured Wealthy Depositors on Day Bank Collapsed
Our secret, single anonymous source shares transcripts of NSA-recorded calls with former SVB CEO Greg Becker. Satire warning.
Satire warning.
Early morning, Friday, March 10. Part 1.
“Mr. Becker!” the secretary barked just outside the Silicon Valley Bank office of CEO Greg Becker (make that former CEO) very early on a Friday morning, even by California standards.
“Wait - I’m on the phone with my wife,” he responds. Cupping his phone, he asks, “who is it?”
“It’s Mark Cuban,” she turned from her desk outside his office and responded, referring to the billionaire owner of the National Basketball Association’s Dallas Mavericks. Her multi-line landline was blinking like a Christmas tree.
“I’d better take that one,” he responded, reaching for his morning coffee. “Look,” he returns to his phone and tells his wife, Marilyn Bautista, “let me call you back. Get tickets on United for our other home in Maui. First class, of course.” Pause. “Probably leaving early next week. One way for now. Use your Bank of America personal credit card. Pause. No, its better that you do it. I’ll explain everything later. Thanks. Love you, too.”
Becker gingerly punches line two on his landline. He had long powered down his cell phone, which had been buzzing like a hornet’s nest since late Thursday afternoon.
“Mark, it’s Greg; how are you?”
“What the hell, Greg?” Cuban seethed. “I’m hearing reports about you and your bank, and you won’t answer your f***ing cell phone. What the HELL? Your online banking system is on the fritz! I can’t do a transfer! I can’t get my money out! Do I have to go stand in line like everybody else?”
“My apologies, Mark, but we’re dealing with a post by our mutual friend, Bill Ackman, telling people on Twitter that we’re in trouble. We’re selling some assets. We’re fine.”
“THAT’S NOT WHAT I HEAR,” Cuban yelled. “‘Fine’ is just another four letter f-word. I’ve got ten million dollars in your bank. I’m closing on a new chalet and need the money now.”
“Oh, Mark, you can always use our Swiss Chalet!” Becker responded. “That’s why we bought it, as a service to our largest depositors like you.”
“I DON’T WANT TO USE YOUR CHALET,” Cuban yelled again. “I want MINE. I want the money transferred to my JP Morgan account immediately. Capisce?”
Becker sighed. “I’ll see what I can do. Things are a little harried right now. Your deposits will be fine. I’ll see to it. Trust me.”
“Ten million. I gave your secretary my JP Morgan account number. Within the hour. I am on the phone closing on my new chalet right now. I’m counting on that cash.” He paused as the former Shark Tank star Cuban was about to slam down the phone.
“If you need me to call someone in Washington, let me know. I know people. I bet my pal Ted Leonsis can get Biden and Yellen on the phone.” The billionaire Leonsis owns the NBA’s Washington Wizards and two other professional sports teams. He’s also a major Democratic donor and a tech industry entrepreneur.
“Thanks, Mark, but have you met my Board? It is chock full of well connected Democrats,” Becker responded. You know Garen Staglin, the Napa Valley winemaker whose vineyard was featured in the movie, “Parent Trap.” He’s a big Democratic donor. And Mary Miller implemented the Dodd-Frank law as an Under Secretary for Domestic Finance during the Obama Administration.”
“You’d better put ‘em to work,” Cuban urged. “It’s good to have friends in high places at times like this.” Becker heard a loud click.
“Mr. Becker!” the Secretary yelled again. “Patrice Cullours is on line three. She says it’s urgent.”
“I’d better take that one,” Becker responded. “I can use their help right now,” referring to the Black Lives Matter Global Foundation, among other BLM-related charities and causes that Cullours co-founded. I’ve never said no to her, and it’s no time for her to say no to me, Becker thought. Wait, didn’t she step down from running BLM’s foundation, Becker pondered? He shook his head and muttered; it doesn’t matter now. All hands on deck.
“Patrice!” Becker thundered. “Nice to hear from you. To what do I owe this honor?”
Becker heard a slurping noise as he waited for a response. “Sorry, Greg, I was just taking a sip of water when you picked up the phone,” Cullours responded.
“First, thanks again for the $73 million you and SVP have committed to Black Lives Matter. You’ve been a real leader in support of social justice. I’m just calling to see when the next installment might be arriving?”
As he listened to her question, Becker heard the wind, splashing noises, and faint laughter over the phone.
“Well, you know we’re good for it,” he responded. “We just made a new $5 billion commitment to carbon neutrality and sustainability causes. “By the way, are you outside somewhere?”
“Why is there salt on the rim?” Becker heard Cullours’ muffled voice muttering to someone. “I wanted a mimosa! Not a marg! Not for breakfast! Tell the bartender to get it right!”
“Sorry, Greg, I was distracted. Calling from outside one of our BLM properties here in Studio City that your investment helped make possible. Things are really hopping here, thanks to you.”
“Glad to hear. Things are hopping here as well,” Becker said. His secretary briskly walked in with a note - Governor Gavin Newsom was on line five. “And by the way,” the secretary whispered, overhearing the conversation, “the final BLM check cleared last week.” Becker sighed in relief.
“Patrice, Governor Newsom is on the phone. I’m sorry, I really must take that call. Anything else I can do for you? By the way, BLM’s support of our bank means a lot right now.”
“Oh, that’s great; I love Governor Newsom. Tell him that I said hello. When is your last check coming?”
“It’s just cleared, I was told,” Becker responded. “Thanks!” Cullours exclaimed as she quickly hung up.
Becker paused and took a deep breath as he tapped line five. A mimosa sounded pretty inviting right now, he thought.
“Governor, how are you?” Becker asked.
“Hi, Greg. I hear you were speaking with our mutual friend, Patrice?” Newsom asked. “I trust things are good between the two of you. How is she?”
“Seems to be doing fine, Governor, and sends her greetings,” Becker responded. “What can I help you with?”
“Two things. First, I wanted to thank you for the $100,000 donation to my wife’s gender equity foundation,” Newsom said. “That means a lot, and I appreciate your focus on stakeholder capitalism, instead of that outdated, privileged notion of “shareholder value,” something I’ve learned from our mutual friends, Jamie Daimond and Klaus Schwab. Doing well by doing good, I always say.
“But second, a little heads-up. I’m told that our state banking regulators are coming to visit with your CFO. Things okay? You’re taking some hits on Twitter this morning.”
“Things are fine, governor; we’re dealing with a small cash flow problem. Bill Ackman is out there spreading rumors about us. We just announced last night that we’re selling some holdings and looking for a little capital investment to help with things after deposits didn’t meet our expectations last month. I think we’ll be okay by the end of the weekend.”
“Good to hear. I’m one of your depositors, you know,” Newsome reminded. “Need me to check in with (Treasury Secretary) Janet (Yellen)? Happy to keep the wolves at bay,” Newsom offered. “The least I can do.”
“That would be great, Governor,” Becker said. “It wouldn’t hurt. If your regulators are on their way over, the Federal Reserve can’t be far behind. I’m sure it’s nothing we can’t handle. I appreciate the offer.”
“Good. Call me if you need anything else. I’ll make sure all your depositors are protected,” as Newsom hung up. Becker looked up as he let Newsom’s last sentence roll around slowly through his thoughts.
“Mr. Becker!” His Secretary startled Becker. “There’s a group from the Federal Reserve bank in the lobby. They’re asking to see you or Mr. (Daniel) Beck,” Silicon Valley Bank’s CFO. “Someone from the Federal Deposit Insurance Corporation (FDIC) is with them—something about your filing last night. The state banking officials are already in the CFO’s office.
“And Anthony Wood is on line one,” she added, referring to the founder and CEO of Roku, the fast-growing streaming service that has led millions of former cable customers to cut their cords.
“Mr. Wood, an honor to hear from you,” Becker said as he quickly picked up the phone while punching line one. Roku held at least $487 million of his cash in his bank, and the last thing he needed was them trying to move their money.
“Mr. Becker, greetings,” Wood said in his unmistakably British accent, despite graduating from Texas A&M. “I hear we may have a problem with our deposits at your bank.”
“We’re having a little cash flow issue right now, coupled with some unfortunate media coverage this morning,” Becker nervously exclaimed. “We’ll be fine. We announced yesterday that we are selling $21 billion in assets to cover a shortfall in new deposits last month. We don’t have a big loan portfolio, so the deposits matter. We’re good. We’ll take a small hit since they involve US government and mortgage-backed securities at low interest rates, but nothing we can’t handle.”
“That’s good to know,” Wood quickly exclaimed, “because we look a little foolish keeping so much cash in one bank. My board is a little unhappy, and I’m a little unhappy with my CFO. I’m sure you understand. We’re going to need to diversify.”
“Understood,” Becker said. “If you could just wait, we’ll work something out. Maybe by the middle of next week. By the way, I’ve got a couple of open weeks at our chalet in Switzerland if you want to get away for a few days. Snow’s good, I’m told.”
Pause.
“OK for now, but we’re watching things closely,” Wood said nervously. “I wouldn’t want to do anything drastic that might complicate such things further.”
“Neither would I,” Becker said. “As you might imagine, my phone is ringing off the hook. We’ll keep you apprised,” Becker concluded. “We value your trust,” he affirmed, gently hanging up the phone.
Becker wiped the top of his bald head and looked toward his secretary. “Please get my stock broker on the phone.”
Broker answers. “Mr. Becker, how are you?”
“Not great. Been rough Friday morning, and it’s still early. I just wanted a status report on the $3.6 million SVB stock sale I executed two weeks ago. Where’s the cash?"
“Why, I’ve put the sale’s proceeds into the brokerage sweep account, just like you asked. The stock sale was completed last week, just as planned,” the broker quizzically responded. “Just waiting on further instructions.”
“Thanks. I’ll let you know after I make it home to Maui,” Becker uttered as he hung up.
“Your wife’s back on the phone,” Becker’s secretary said. “She’s seeking my help to buy your first-class tickets on United to Maui. When do you want to leave? What credit card should I use? I’m having trouble with your SVB card. Should I use her card?”
Becker paused, just staring into the distance.
His secretary stared back, then stood up from her desk, turned, and nervously marched into Becker’s office towards his ample desk. Leaning over, arms crossed, she asked, “Do you really think this a good time to travel to your home in Maui?”
Becker paused and gave his secretary the hairy eyeball. “There couldn’t be a better time.”
Part 2 tomorrow.
A great satire that fingers some of real-life figures in this sad tale of personal greed hiding behind the pretense of doing good.
Wm. Hamilton, Ph.D.