Shark Tank star Kevin O’Leary had billions of dollars of his company’s money tied up in the failed Silicon Valley Bank (SVB), despite publicly criticizing the bank’s executives as “negligent” and “idiots.”
During a recent interview with Fox News’ Sean Hannity, O’Leary was questioned about his connection to SVB, given his criticisms of the bank.
It turns out that several companies in O’Leary’s private equity portfolio had deposits with SVB, including his crypto firm Circle, which held $3 billion in the bank.
O’Leary reiterated his criticisms of SVB during the interview, but when Hannity asked why he kept his money with them, O’Leary responded by saying that SVB was just one of many banks he had his money in.
He also pointed out that anyone with more than $250,000 in any institution was a hedge fund or savvy investor who understood the risks and acted accordingly.
He agreed with the Federal Deposit Insurance Corporation’s (FDIC) mandate to keep FDIC-insured deposits at $250,000, but criticized the recent decision to scrap the cap for all SVB customers, regardless of their deposit amount.
SVB became the largest bank to collapse since the 2008 financial crisis last week, which meant that only deposits of $250,000 could be reclaimed under the FDIC.
However, the cap was scrapped in a move that protected all SVB customers. O’Leary criticized the move, saying that customers like him did not need the money, and added that he had told all his CEOs to diversify their deposits across many institutions.
O’Leary also talked about his loss of $15 million following the collapse of crypto firm FTX last year.
He had been promised the amount when he signed on to be an ambassador for the firm run by disgraced boss Sam Bankman-Fried in August 2021.
However, the deal was rendered worthless when FTX filed for bankruptcy amid a series of criminal probes into the company.
O’Leary said that he had fallen victim to “group think” and admitted that FTX investors now looked like “idiots.”
In conclusion, O’Leary’s criticisms of SVB’s executives did not stop him from keeping billions of dollars in the bank, and his loss of $15 million in FTX highlights the risks involved in investing.
He emphasized the importance of diversifying deposits across multiple institutions and cautioned against the punitive regulatory environment faced by small regional banks.