On Thursday's "Hugh Hewitt Show," Rep. Ro Khanna (D-CA) stated that there were some companies who had deposits in Silicon Valley Bank (SVB) that were "malpractice" and "financially irresponsible."
Khanna said SVB depositors should have been protected and some of them were "leading in AI and defense tech. If you care — if people care about the United States being ahead of China, you wipe those companies out, you're basically losing a lot of the defense technology to China. Some of these are being funded by DIU, by DARPA. These are companies that are developing the cure for cancer, these are companies, by the way, that employ people across the country. There was a payroll company that employs 400,000 Americans. And so, look, people may not love Silicon Valley venture capitalists. They may not love Silicon Valley. They may think Silicon Valley has made too much money. That wasn't the question. The question was, do you want to make sure that these 50,000 companies that just had money in their bank deposits were going to be able to make payroll and survive?"
Host Hugh Hewitt then asked, "Roku had $1.8 billion in liquid assets, $600 million of which were at the Silicon Valley Bank. Now, Roku's run by smart people. They're changing the industry. They're cutting the cord everywhere. So, obviously, they're very smart people. But is tech so insular, so absolutely divorced from traditional rules of banking that they ignored having $600 million on deposit in one bank with a $250,000 deposit insurance? What's wrong with the tech world?"
Khanna answered, "That was malpractice. I can't defend them. I don't know them. They may be an incredibly savvy technology company, but they need someone who's taken Accounting 101. I mean, to have that kind of money and not to have it in a sweep account or in a mutual market account or in bonds, and just to have it sitting in a bank account was just financially irresponsible."
Follow Ian Hanchett on Twitter @IanHanchett
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