Top Silicon Valley Bank execs worked at notoriously troubled Lehman Brothers, Deutsche Bank
Two executives at doomed Silicon Valley Bank and one of its corporate siblings faced social media scrutiny Monday over their ties to notoriously troubled financial giants — the now-shuttered Lehman Brothers and the scandal-scarred Deutsche Bank.
The employment records of SVB’s Kim Olson and SVB Securities executive Joseph Gentile raised eyebrows on social media after the tech lender’s rapid meltdown prompted fears of a systemic economic crisis. The feds were forced to bail out SVB on Sunday to restore public confidence in the banking sector.
Gentile serves as chief administrative officer of SVB Securities, a standalone investment bank wholly owned by parent company SVB Financial. But prior to taking that role in 2007, Gentile had a short stint as the chief financial officer for the fixed income division of Lehman Brothers’ Global Investment Bank.
Lehman Brothers was a Wall Street giant until it collapsed into Chapter 11 bankruptcy on Sept. 15, 2008. The firm’s implosion had a devastating impact on the US economy and was a key factor in the economic turmoil of the Great Recession.
While Gentile left Lehman Brothers well before the investment bank’s collapse, social media users quickly pointed out the connection.
“This is truly unusual,” Unusual Whales tweeted regarding Gentile’s background.
SVB Securities pushed back on the social media uproar in a statement, noting that Gentile left Lehman Brothers 18 months before its collapse.
The firm also reiterated that its operations are separate from those of Silicon Valley Bank – with Gentile having nothing to do with the latter’s collapse.
“It is unfortunate that his 6-month stint at Lehman Brothers as the CFO of their Fixed Income Division, is in some way, shape or form, being connected to the unfortunate events that have occurred at Silicon Valley Bank, of which Joe is not and was never an executive,” SVB Securities said in a statement.
“SVB Securities is a separate entity from Silicon Valley Bank, the commercial bank of SVB Financial Group (SVBFG) that was closed by the FDIC as receiver,” The firm added.
In a separate statement published on its website, SVB Securities said it was “financially stable and will continue to operate as usual” despite its affiliate SVB’s downfall.
Olson was hired as SVB’s chief risk officer in January. Before joining the tech lender, she had a stint in a senior risk management role at Deutsche Bank during the Great Recession.
In 2017, Deutsche Bank was forced to pay a massive $7.2 billion penalty after admitting it lied to investors about its mortgage-backed securities — the collapse of which was a major factor in the housing market’s implosion during the financial crisis.
Before her stint at Deutsche Bank, Olson was a managing director at Fitch Ratings, the agency that makes determinations on the creditworthiness of investments and institutions.
“SVB has an impressive track record of sound growth and remaining true to its strategy of serving the innovation economy,” Olson said in the company’s January press release announcing her hiring.
Prior to Olson’s hiring in January, SVB went approximately eight months without an active chief risk officer. The previous executive who held that role, Laura Izurieta, had stepped down last April.
Neither Olson nor Gentile has been accused of any wrongdoing in connection to SVB’s collapse.
SVB was placed in federal receivership last week after its disclosure of a $1.8 billion loss triggered a flurry of withdrawals from its worried clients.
In a speech Monday morning, President Biden called for SVB’s leadership team to be fired from their posts and warned that any executives responsible for the crisis would be “held accountable.”
The Post has reached out to SVB, Gentile and Olson for comment.
