MONDAY KETCHUP: SVB gets bought by a WORSE governed bank, sports bros are sexual harassy, tech bros are symbiotic, and business news hates Israel

Live from the West Hartford Fire Department Magazine Reading Nook, it’s yet another Manic Monday edition of Business Pants. Joined as always by our Lord of the BS, Matt Moscardi. In today’s ESG-stained bag of materiality called March 27, 2023: Sexy Story Updates and !

DAMION1

1. Bank-a-lozer-palooza

1. First Citizens buys Silicon Valley Bank

1. The Raleigh, NC-based bank now owns 17 branches of SVB and paid $72 billion for the California lender's assets.

2. BS: Family firm: 3 directors control 75% influence

3. Matt

1. They DO have a risk committee

2. They do NOT have any risk experts

3. The collective influence of the risk committee is… drumroll… 5%!

4. SVB was bought by a firm with worse governance and less risk oversight than SVB!

2. Credit Suisse's top execs could face a probe over their role in the banking giant's collapse, Swiss watchdog says

1. "We are not a criminal authority, but we are looking into the relevant possibilities," Marlene Amstad said when asked whether FINMA would hold Credit Suisse managers to account for the failure. "CS had a cultural problem that translated into a lack of accountability ... Often it was not clear who was responsible for what ... This favored a negligent handling of risks."

2. Matt

1. Of the 11 executives listed on the executive committee, four are women.

2. All four women started their roles… IN 2022!  LADIES, CLEAN UP THIS MESS!

3. Saudi National Bank chairman quits after his comments sparked Credit Suisse turmoil — and $1 billion in losses for his company

1. Ammar al-Khudairy told Bloomberg TV that his bank would “absolutely not” be willing to assist if Credit Suisse needed more capital, sending the Swiss bank’s shares to record lows. Mr. Khudairy explained that SNB owned 9.8% of the bank and wasn’t interested in the regulatory requirements that would accompany going above 10%. 

4. Time to ask what the directors were doing at these failed banks

1. The fragility of financial institutions suggests serious lapses in corporate governance in banking and beyond

2. To date, there has been only a superficial debate about governance at these banks.

3. Should investors have fretted that just one of SVB’s independent directors had serious banking experience, for example, and that he did not sit on its risk committee. (One director who did brought “deep experience in the premium wine industry”.) 

4. Even beyond banking, though, investors should use this moment to pull back from the corporate governance culture wars and ask themselves why the age of ESG has not given us better governed companies.

5. Matt

1. For the record, WE sent Andrew Edgecliffe-Johnson OUR data for the story last week and OUR talking points, including the show - he did not quote us, but did a stellar of cribbing our notes and stealing our lines.  Andy, you’re welcome.

2. Jerky Sports Bros

1. Vince McMahon Will Reimburse WWE Board $17.4M For Its Sexual Misconduct Investigation

1. A special committee of WWE’s board of directors conducted the investigation, which included revising the company’s financial statements for 2019, 2020 and 2021, and the first quarter of 2022, it said.

2. Mr. McMahon abruptly departed from WWE in July 2022 following disclosures by The Wall Street Journal of multiple payouts to women who had alleged sexual misconduct and infidelity. The Journal reported that he had agreed to pay more than $12 million in secret settlements since 2006 to his accusers.

3. WWE’s board ultimately found that the payments, though made by Mr. McMahon personally, should have been booked as WWE expenses because they benefited the company.

2. Daniel Snyder has declined to be interviewed in NFL’s investigation

1. Washington Commanders owner Daniel Snyder has declined to be interviewed by attorney (and former SEC Chair) Mary Jo White thus far as she conducts the NFL’s second investigation into Snyder and the team

1. Throughout her career, White has represented members of the Sackler family and Purdue Pharma in litigation brought by victims of the opioid epidemic.[35] In 2006, White, along with Rudy Giuliani, pressured the Department of Justice not to pursue criminal charges against key executives in Purdue Pharma.

2. Senator Elizabeth Warren wrote a letter to White indicating that her "leadership of the Commission has been extremely disappointing:"

1. White failed to finalize certain Dodd–Frank rules

2. did not curb the use of waivers for companies that violated securities laws

3. allowed settlements without admission of guilt

4. was too frequently recused because of her husband's activities

1. John White’s firm, Cravath, Swaine & Moore. As of 2015 NYT article, she has had to recuse herself from at least 10 investigations into clients of Cravath

5. In 2016, Senator Warren sent a formal written request to President Obama asking for the immediate dismissal of White as Chair of the SEC because of her refusal to develop public disclosure rules of political contributions made by corporations.

3. Tech bro shite

1. As the US grills TikTok CEO, China welcomes Apple CEO

1. when CEO Tim Cook was in China over the weekend for the China Development Forum, the reception was totally different. Cook commented that Apple enjoys a “symbiotic” relationship with China and also stated that “Apple and China grew together” during an interview on the role of technology in education

1. There's a 90% chance TikTok will be banned in the US unless it goes through with an IPO or gets bought out by mega-cap tech, Wedbush says

2. Utah Bans Teens Under 18 From Social Media Without Parental Consent

1. Utah Gov. Spencer Cox (R) signed legislation Thursday prohibiting minors from using social media without parental consent, in the nation’s most sweeping regulations targeting kids and teens’ internet use as criticism of social media platforms reaches a fever pitch nationally.

2. Alibaba founder Jack Ma returns to China after a year of uncertainty

3. Elon Musk Values Twitter at $20 Billion

1. The billionaire bought the social media company for $44 billion in October and took it private

4. Elon Musk reportedly left OpenAI's board in 2018 after Sam Altman and other cofounders rejected his plan to run the company

1. When Elon Musk left the board of OpenAI in 2018, the stated reason was to avoid any potential conflict of interest with Tesla. A new report from Semafor points the finger elsewhere: a failed takeover attempt.

2. Musk told fellow cofounder Sam Altman in early 2018 that he thought OpenAI, which has since created ChatGPT, was lagging behind Google, people familiar with the matter told Semafor. Musk offered to take charge of OpenAI to lead it himself, but when Altman and other co-founders said no, Musk stepped down from the board and backed out of a huge donation, per Semafor.

1. Sam Altman, who was already wealthy before starting OpenAI, reportedly doesn't own any equity in the company behind ChatGPT

1. OpenAI CEO Sam Altman took no equity in the company when it became for-profit, Semafor reported.

2. Altman was already wealthy from his investments in successful startups before he cofounded OpenAI.

3. He reportedly said OpenAI was not meant to make money, and not having equity would keep him aligned to its mission.

2. "I mean, he's a jerk, whatever else you want to say about him — he has a style that is not a style that I'd want to have for myself," Altman told Swisher. "But I think he does really care, and he is feeling very stressed about what the future's going to look like for humanity." 

5. Salesforce Shakes Off Proxy Fight From Elliott

1. Elliott decided to back down following the business-software provider’s better-than-expected financial results, as well as other changes initiated at the company in recent weeks, including cost cutting, boosting share buybacks and disbanding a mergers-and-acquisition committee, according to the two companies.

6. Peter Thiel's reported romantic partner was found dead in Miami. Police are investigating as possible suicide.

1. Miami police view the case as a possible suicide and plan to interview Thiel, The Intercept said.

4. And finally, a story that the business news is NOT talking about despite directly involving, um, business

1. I’m looking at you: Forbes, Business Insider, CNBC, etc.

2. McDonald’s Israel shuts branches, as workers join general strike against judicial reforms

1. McDonald’s said it was joining the general strike in Israel on Monday as workers spanning multiple sectors walk out over Prime Minister Benjamin Netanyahu’s planned judicial reforms that opponents say would give Prime Minister Benjamin Netanyahu and his government inordinate control over the judicial branch. Under the proposed changes, the executive branch of the government would have control over appointing judges to Israel’s Supreme Court and allow court decisions to be overturned by the government with a simple parliamentary majority. Protesters say these changes would turn Israel into an autocracy.

2. The fast food chain tweeted on Monday that it would begin to close restaurants from 12 p.m. until a total shutdown by 2 p.m.

3. McDonald’s operates 226 kosher and non-kosher restaurants across the country.

4. The strike is planned by trade union group Histadrut, which represents nearly 800,000 workers in sectors such as health, transit and banking. Flights departing from Ben Gurion Airport have also been grounded as workers join the strikes, affecting thousands of travelers. Doctors and seaport workers are also part of the walkout. Even Leumi, the country’s largest bank, is closing branches as part of the strikes.Some universities were shuttered and some of the country’s best-known retailers, including  shopping mall chain Azrieli Group, announced closures.

1. BS:

1. Azrieli: Family firm: 4 directors (3F) 82% influence

2. Bank Leumi: 42% F-power (33%)