Top Conservative Entrepreneur Had Massive Amount ‘Stuck’ In Silicon Valley Bank During Collapse | Eastern NC Now

    Publisher's Note: This post appears here courtesy of the The Daily Wire. The author of this post is Ben Zeisloft.

    PayPal co-founder and prominent conservative entrepreneur Peter Thiel retained an account balance of $50 million with Silicon Valley Bank even as the company imploded last week.

    The Federal Deposit Insurance Corporation assumed management of the $212 billion in assets controlled by Silicon Valley Bank, which state regulators in California closed on Friday, in order to strengthen confidence in the American financial system. Thiel did not move his balance with the company even as Founders Fund, a venture capital firm he co-founded, advised clients to withdraw their deposits as quickly as possible.

    "I had $50 million of my own money stuck in SVB," Thiel commented in an interview with Financial Times, adding that he did not remove his funds because he did not believe that the bank would fail. His account was frozen when the FDIC took control of the company, but is now accessible after the Federal Reserve provided emergency funds on Sunday to aid depositors.

    Silicon Valley Bank announced a share sale last Wednesday to cover for heavy losses from the liquidation of long-term assets in a $21 billion bond portfolio. Executives at Founders Fund had started making calls and moving funds out of the financial institution by the next morning and advised their portfolio companies to follow suit, according to a report from Axios.

    News of the efforts spread throughout the industry even as Thiel was not involved in the discussions. "Thursday morning it was clear we were in the middle of a bank run, and we reacted in line with our fiduciary duties," Founders Fund CFO Neil Ruthven told Axios.

    Several prominent venture capital firms announced on Tuesday that they would return funds to Silicon Valley Bridge Bank, the new entity created by the FDIC, and said they would recommend that their portfolio companies do the same. Silicon Valley Bridge Bank CEO Tim Mayopoulos, who was appointed to replace Greg Becker as the head of the company, wrote in a memo to venture capital clients that "the number one thing you can do to support the future of this institution is to help us rebuild our deposit base, both by leaving deposits with Silicon Valley Bridge Bank and transferring back deposits that left over the last several days."

    Large banks such as Wells Fargo and Citigroup have witnessed a deluge of new deposits as worried customers move their funds away from regional banks, according to a report from CNN. Several entities are meanwhile in discussions to assist First Regional Bank, which is heavily involved in wealth management and has many customers with deposits exceeding the $250,000 threshold protected by the FDIC, with deposits as some raise concerns that the collapse of smaller banks could induce a wave of consolidation in the financial services sector.

    The vast majority of deposits at Silicon Valley Bank, which offered services to nearly half of the venture-backed technology and health care firms in the United States, exceeded the $250,000 threshold typically insured by the FDIC. Regulators scrambled to guarantee all deposits at Silicon Valley Bank such that the remainder of the financial system, in which roughly half of deposits surpass $250,000, would remain protected from the possibility of bank runs.