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Silicon Valley Bank signed exclusive banking deals , leaving Some unable to diversify

Silicon Valley Bank had exclusivity clauses with some of its clients, limiting their ability to tap banking services from other institutions, SEC filings show.

The contracts, which made it impossible for those clients to safely diversify where they kept their money, varied in language and scope. CNBC has reviewed six agreements that companies signed with SVB regarding financing or credit solutions. All required the companies to open or maintain bank accounts with SVB and use the firm for all or most of their banking services.

Those arrangements are particularly problematic now that SVB has been seized by federal regulators after last week’s run on the bank. The Federal Deposit Insurance Corporation only insures up to $250,000 in deposits for each client, leaving SVB’s customer base, which is heavily concentrated in tech startups, fearful that millions of dollars in operating funds would be locked up for an indefinite period of time.

Banking regulators devised a plan Sunday to backstop depositors with money at SVB to try and stem a feared panic across the industry after the second-biggest bank failure in U.S. history.

As part of a multi-million dollar financing agreement with online-lending platform Upstart Holdings,
SVB required that the company maintain all of its “operating and other deposit accounts, the Cash Collateral Account and securities/investment accounts” with SVB.

The contract made certain allowances for accounts at other banks, but set strict limits on their size.

Cloud software vendor DocuSign also had an exclusivity contract with SVB, filings show, requiring that the e-signature company keep its “primary” depository, operating, and securities accounts with the bank. That covenant was part of a senior secured credit facility between DocuSign and SVB dated May 2015. DocuSign was allowed to keep existing deposit accounts that were held at Wells Fargo.

Upstart held its IPO in 2020, two years after DocuSign’s debut.

SVB provided a multi-million dollar loan to Sprout Social, which went public in 2019. The bank required that the social media management software company maintain all of its “primary operating and other deposit accounts, the Cash Collateral Account and securities/investment accounts” with SVB.

As with Upstart, SVB set strict limits on the value and type of accounts that Sprout could hold elsewhere.

In another loan and security agreement with Limelight Networks, which became Edgio, SVB required that the company similarly maintain all “operating accounts, depository accounts, and excess cash with Bank and Bank’s Affiliates.”

The contract included an exception for international bank accounts but required that Limelight use only SVB’s business credit cards.

Founded 40 years ago, SVB grew to become the 16th largest U.S. bank by assets and a major venture debt provider, supporting companies in their infancy and providing the type of liquidity that startups couldn’t get from most traditional banks.

SVB didn’t immediately respond to a request for comment.

Dexcom signed a loan and security agreement with SVB, requiring the maker of products for managing diabetes to maintain its accounts at the bank and to transfer cash held elsewhere within 90 days of the contract.

Dexcom’s agreement with SVB also required the company to open a lockbox and maintain the “majority” of the company’s securities accounts with the bank.

Also within the health-tech market, SVB had an exclusivity contract with Hyperion Therapeutics, a drugmaker that was acquired in 2015 for $1.1 billion by Horizon Pharma.

Hyperion was required to bank only with SVB, but notably did not have to give the firm control over any accounts it used for “payroll, payroll taxes, and other employee wage and benefit payments.”

Representatives from Upstart, DocuSign, Sprout Social, Edgio, Dexcom and Horizon didn’t immediately respond to requests for comment.


Jeniffer Wexton on:

public Safety

Crime has vaulted near the top of voters’ concerns, just after the economy and inflation. According to Gallup, 80 percent of Americans worry “a great deal” or a “fair amount” about crime, the highest level in two decades.


Such fears pose yet another midterm election hurdle for Democrats, on top of public angst over soaring prices and President Biden’s dismal public approval ratings.


As a former prosecutor, substitute judge, legal advocate for children, state Senator, and as a legislator, Jennifer Wexton should be well aware that our society is a dangerous place. Wexton should understand that our children, the elderly, and everyone else in between needs to be protected from violent criminals and repeat offenders. She ignores this and advocates on their behalf with light sentences, “no cash bail”, Criminal Justice Reform, and Restorative Justice.


Do you recall the rape of a (15) year old girl in a Loudoun County High School bathroom in May 2021 by a transgendered student? If this wasn’t bad enough, “Criminal Justice Reform” allowed for the rapists sentenced to be reduced, removing him from the sexual assault registry and providing supervised probation. To make matters worse, the Loudoun County Public Schools Superintendent Scott Ziegler IGNORED the federally mandated processes and procedures when incidents of this nature occur, and now Wexton is abolishing Title IX protections under HR5-Equality Act.


Jennifer Wexton got the ball rolling on the rapists lenient sentence by introducing Bill NO. 1082 in 2017, which passed (and she’s proud of it, see video during meeting with NAACP).

In 2019, Wexton proudly endorsed Buta Biberaj for Loudoun County Commonwealth Attorney. Prior to being elected, Biberaj was the legal redress for the Loudoun NAACP; this is not an insignificant detail. Biberaj also belongs to the Virginia Progressive Prosecutors For Justice. The VPPFJ’s primary goal is “Criminal Justice Reform” or “Restorative Justice”.


Wexton, Biberaj are closely aligned Progressive ideologues and share questionable associations with a variety of organizations and people.

Who could forget the Black Lives Matter riots of 2020 over George Floyd. Wexton is so radical that she sponsored the “George Floyd Justice Policing Act” (defund the police) and the “Mental Health Justice Act” that allowed for increased funding for social workers that are meant to take the place of police officers around the country.


These are only a few examples of what Wexton and the Progressive Democrats “Criminal Justice Reform” and “Restorative Justice” look like for Public Safety:


More on Wexton and Public Safety

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