Collapsed tech industry lender Silicon Valley, which collapsed last week as borrowers defaulted on loans and investors withdrew funds is proof of the mantra: Get Woke, Go Broke. News emerging from the wreckage reveals that the Bank operated without a chief risk officer between April 2022 and January 2023 while the operation's United Kingdom-based CRO stands accused of prioritizing pro-diversity initiatives over her actual role.
This revelation comes after the firm,, which ceased trading on Friday 10 March, became the largest bank to collapse since the 2008 financial crisis - disclosing a $1.8 billion loss in its finances. The news is expected to trigger chaos when stock markets resume trading on Monday.
Last Thursday, March 9, Founders Fund, a prominent venture capital firm founded by
billionaire investor Peter Thiel advised its companies to move their funds out of SVB,
according to one person familiar with the matter who asked not to be
identified discussing private information.
SVB Financial Group Chief Executive Greg Becker held a conference call on the same day advising clients of SVB-owned Silicon Valley Bank to “stay calm” amid concern about the bank’s financial position, according to another person familiar with the matter.
SVB CEO Greg Becker, not in the running for Businessman of the week award (Picture: LA Times)
Becker held the roughly 10-minute call about 11:30 a.m. Pacific time. He asked the bank’s clients, including venture capital investors, to support the bank the way the bank has backed its customers over the last 40 years, according to the person.Worries surrounding the lender ricocheted around Silicon Valley on Thursday. There is “a good deal of panic,” said Jenny Fielding, managing partner at the fund, which invests in early-stage companies.
SVB's former head of risk, Laura Izurieta, who formerly performed a similar role for Capital One, left the bank in April 2022. She wasn't replaced until January 2023 when the bank hired Kim Olson, formerly of Japanese bank Sumitomo Mitsui.
But the story here is not the change of personnel, it is that after Izurieta left, SVB's Chief Risk Officer's office in the bank's Santa Clara headquarters stood empty, instead of overseeing and managing risks associated with SVB's European, African and Middle Eastern portfolios, the nominal deputy CRO, Jay Ersapah -- a self-described "queer person of color from a working-class background" -- was busy organising an assortment of woke programs, including a month long LGBT Pride event as she co-chaired SVB's "European LGBTQIA+ Employee Resource Group."
On taking over the role of CRO in January, Kim Olsen said, "SVB has an impressive track record of sound growth and remaining true to its strategy of serving the innovation economy. I am excited to lead SVB’s outstanding risk management team and continue to build SVB’s risk management framework and capabilities in this important next chapter of the firm’s trajectory,"
Just six weeks later the bank went broke. For the sake of fairness we must assume Olsen was given misleading information in the handover from her predecessor.
The bank's CEO Greg Becker credited Olson's 'deep and multi-faceted financial services experience as a senior risk leader and former regulator and bank supervisor positions her perfectly to actively manage SVB’s financial and non-financial risks.'
An exerpt from Diversity, Equality and Inclusion, a brochure SVB 14 months published before it collapsed
Obviously Kim was not fully conversant with the risks of taking over a job from an LGBTQWERTYIA activist whose priorities were noting to do with the company or its business. In fact in naming Ersapah as a top 100 LGTBQ Future Leader, professional network Outstanding said:
'Jay is a leading figure for the bank’s awareness activities including being a panelist at the SVB’s Global Pride townhall to share her experiences as a lesbian of color, moderating SVB’s EMEA Pride townhall and was instrumental in initiating the organization's first ever global "safe space catch-up", supporting employees in sharing their experiences of coming out,' her bio on the Outstanding website states.
It adds that she is 'allies' with gay rights charity Stonewall and had authored numerous articles to promote LGBTQ awareness.
These included 'Lesbian Visibility Day and Trans Awareness week.'
Separately she was also praised in a Facebook post by the group 'Diversity Role Models,' a charity which campaigns against homophobic, biphobic and transphobic bullying in UK schools.
While obviously too busy to oversee financial risk exposure, Jay Ersapah found time to run a program for SVB 'non - straight' employees to share their coming out experiences (Picture Daily Mail)
The bank's website says that the CRO at the bank reports to a seven-person committee made up of board members and the CEO.
One would hope other businesses can learn from the SVB collapse and in future ensure they hire only people whose professional focus is on profit and loss rather that LGBTQ awareness and minority rights. A story that was often told when I was studying economics concerned Lord Northcliffe, founder of lowbrow and sensationalist newspaper The Daily Mail which sold for a penny.
When outraged criticts accused Northcliffe of appealing to the lowest levels of society, he reputedly replied: "And why not sirs, their penny is as good as yours and there's a damn sight more of 'em."