Silicon Valley Bank pushed ‘woke’ programs ahead of collapse

Business

By Katherine Donlevy

March 11, 2023 | 20:24

A head of risk management at Silicon Valley Bank spent a long time spearheading several “awake” LGBTQ+ programs, including a “safe space” to come forward with stories, as the firm teetered on the brink of collapse.

Jay Ersapah, Head of Financial Risk Management at SVB’s UK division, launched initiatives such as the company’s first month-long Pride campaign and a new blog emphasizing mental health awareness for LGBTQ+ youth.

“The phrase ‘you can’t be what you can’t see’ resonated with me,” Ersapah was quoted as saying on the company’s website.

“As a queer person of color and a first-generation immigrant from a working-class background, there weren’t many role models for me to ‘see’ growing up.”

Her efforts as co-chair of the company’s European LGBTQIA+ Employee Resource Group earned her a spot on SVB’s “Outstanding LGBT+ Role Model Lists 2022,” a list shared in a company filing just four months before the bank was shut down by federal authorities due to liquidity concerns.

In addition to instituting SVB’s first “safe space catch-up”—which encouraged staff to share their coming-of-age stories—and serving on LGBTQ+ panels around the world, Ersapah also spent time in the past year serving as director of diversity role models and voluntary work as a mentor for Migrant Leaders.

“I feel privileged to co-chair the LGBTQ+ ERG and help spread awareness of lived queer experiences, partner with charities and above all create a sense of community for our LGBTQ+ staff and allies.”

Ersapah could not immediately be reached for comment.

SVB was abruptly shut down Friday by the California Department of Financial Protection and Innovation, shortly after it revealed it had taken a $1.8 billion hit from a $21 billion fire sale of its bond holdings.

It faced a cash crunch due to rising interest rates, and a recent meltdown in the technology sector prompted many customers to liquidate their deposits.

Shares in SVB Financial, the bank’s parent company, had plunged by as much as 60% on Thursday.

The stock fell another 60% in premarket trading on Friday until it was halted.

On Saturday, Home Depot co-founder Bernie Marcus insinuated that “woke” policies like those launched by Ersapah could have led to SVB’s dramatic failure.

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“I feel sorry for all these people who lost all their money in this woke bank. You know, it was more disturbing to hear that the bank officials sold their shares before this happened. It’s depressing to me,” he told Fox News’ Neil Cavuto.

“Who knows if the Justice Department would go after them? They’re a vigilante company, so I don’t think so. And they’ll probably get away with it.”

The businessman accused the Biden administration of pressuring corporations and banks to consider global warming over shareholder returns, resulting in catastrophic financial pitfalls.

“These banks are poorly run because everyone is focused on diversity and all the wake-up calls and not concentrating on the one thing they should, which is shareholder returns,” Marcus said.

“Instead of protecting shareholders and their employees, they are more concerned about social policies. And I think it’s probably a poorly run bank.

“They’ve been there for years. It’s pathetic that so many people lost money that won’t get it back.”

The impact of SVB’s collapse is not entirely clear, but experts assume it could affect the future of regional and medium-sized banks across the county.

Sources told The Post that wealthy clients frantically pulled their money out of SVB after it collapsed and rushed to put it in big banks like JPMorgan or Bank of America.

SVB’s collapse could herald an end to innovation, others argued — SVB was known for backing startups, leaving a gap that other banks might not rush to fill.