International- Kevin O'Leary has blamed Silicon Valley Bank's management for the bank's implosion.
- O'Leary excoriated the bank's "negligent board of directors" and "idiot management."
"Shark Tank" star Kevin O'Leary has thoughts on why Silicon Valley Bank imploded.
"The combination of a negligent board of directors @SVB with idiot management is the potent cocktail that led to a disastrous outcome. Why should taxpayers bail them out?" O'Leary tweeted on Sunday.
"The lesson is simple, never put more than 20% of your liquid assets in any one financial institution," he added.
The Federal Deposit Insurance Corporation took control of Silicon Valley Bank on Friday after a catastrophic bank run. Depositors ran for the exits after Silicon Valley Bank tried and failed to raise capital.
Silicon Valley Bank's collapse is the largest bank failure in the US since the 2008 financial crisis. The bank is now looking for a new buyer but has not found one yet.
O'Leary, also known as "Mr. Wonderful," is the chairman of O'Leary Ventures. He told CNN separately on Monday that he thinks President Joe Biden has, by helping make depositors at Silicon Valley Bank and Signature Bank whole, effectively "nationalized" the banking industry.
"You have zero risk and that has consequences," O'Leary said. "There's no such thing as a free lunch. And this is going to be very expensive for shareholders of banks long term. I would never put my money into a bank stock ever again."
O'Leary isn't the only person who's blamed Silicon Valley Bank's leaders for the crisis. CNN spoke to a Silicon Valley Bank employee, who said the bank's CEO Greg Becker and other members of the bank's leadership were naive and handled the crisis badly.
"That was absolutely idiotic," the employee, who works in management at the bank, told CNN. "They were being very transparent. It's the exact opposite of what you'd normally see in a scandal. But their transparency and forthright-ness did them in."
Jeff Sonnenfeld, the CEO of the Chief Executive Leadership Institute at Yale, also told CNN that Silicon Valley Bank's leadership should be criticized for their "tone-deaf, botched execution."
There has been mud-slinging in all directions over the factors that may have contributed to Silicon Valley Bank's failure.
Sen. Bernie Sanders says the bank failed because of a Trump-era banking regulation policy. Former President Donald Trump signed a bill into law on May 2018 that significantly rolled back the 2010 Dodd-Frank Wall Street Reform and Consumer Protection Act. This 2018 law raised the asset threshold for systematically important financial institutions from $50 billion to $250 billion, and loosened restrictions on banks like Silicon Valley Bank.
Meanwhile, Gov. Ron DeSantis and Kentucky Rep. James Comer have — without evidence or substantiation — blamed "woke" politics for the bank's collapse.
Representatives for Silicon Valley Bank did not immediately respond to Insider's request for comment outside regular business hours.