Warren, Ocasio-Cortez want details from Silicon Valley Bank’s large depositors

Sen. Elizabeth Warren (D-Mass) and Rep. Alexandria Ocasio-Cortez (D-N.Y.) are pressing some of the largest depositors at the failed Silicon Valley Bank to reveal the nature of their relationship with the firm that collapsed last month.

Warren and Ocasio-Cortez, two of the most progressive lawmakers in Congress, sent letters to 14 of the bank’s largest depositors, raising concerns about the relationship between the failed bank and some of the largest venture capital firms that invested in it.

The fall of Silicon Valley Bank marked one of the largest bank failures in U.S. history and sent shockwaves through the global banking system. While lawmakers worked immediately to try to stop the bleeding from the incident, Warren and Ocasio-Cortez are now attempting to probe the bank’s dynamics with some of its largest investors.

The Democrats ask the companies to disclose how long they had been invested in the bank and how much money they had deposited. The letters also asked about the relationship between company executives and the bank, whether the bank provided the company with perks like low-interest loans and whether those perks were also offered to executives or company investors.

The lawmakers pointed to reports that the bank had offered tech startups benefits that other firms would not have, including low-interest loans and plush extras like ski trips and dinners. Warren and Ocasio-Cortez blasted the potential dynamic as “mutual backscratching arrangements.”

“If these deposits were made by company executives and allowed by corporate boards in exchange for personal perks, that behavior raises potential concerns about whether they were meeting their fiduciary duties,” the lawmakers said in the letters. “According to an FDIC official, the mutually beneficial relationship between SVB and the VC and tech industry may have also undermined regulators’ efforts to sell SVB following its failure.”

The 14 companies that the lawmakers queried are heavily represented by tech and pharmaceuticals: Circle, BILL, BlockFi, Eiger, Ginkgo Bioworks Inc., iRhythm Technologies Inc., LendingClub Corp., Oncorus Inc., Payoneer Global Inc., Protagonist Therapeutics Inc., Roblox Corp., Rocket Lab USA Inc., Roku Inc. and Sangamo Therapeutics Inc. 

The lawmakers are asking for answers from the firms by April 24. The Hill has reached out to all the companies for comment.

Circle told The Hill it had received the letter and is planning to reply by the April 24 deadline.

Updated at 4:50 p.m.