The new CEO of failed Silicon Valley Bank is a familiar name to many in Charlotte’s banking community — Tim Mayopoulos was fired as general counsel of Bank of America in 2008 in the midst of the financial crisis and escorted out of the office by an HR representative.
The Silicon Valley Bank failure was the second-largest in U.S. history.
The FDIC closed Silicon Valley Bank on March 10, started a new bank called Silicon Valley Bridge Bank, and named Mayopoulos as CEO on Monday.
Silicon Valley Bank failed after numerous companies transferred their cash from the bank when it couldn’t raise more capital after a $1.8 billion loss, TheStreet reported Saturday. The huge loss stemmed from a bond investment that was sold since depositors wanted to recoup their cash deposits, according to the financial news site.
In a message on LinkedIn and the new bank’s website clients Monday, Mayopoulos never mentions his ties to Bank of America. He referred to the job he landed next, noting that he was part of the new leadership at mortgage financing company Fannie Mae after the 2008-09 financial crisis.
Mayopoulos was CEO of Fannie Mae from 2012 to 2018, he said. He commuted from Charlotte to Fannie Mae headquarters in Washington, D.C., The Charlotte Observer reported in 2014.
“I am very proud of work we did there to restore the company to profitability and to stabilize the housing finance system in a period of unprecedented challenge,” Mayopoulos wrote in his message.
Fired by Bank of America
In testimony on Capitol Hill in 2009, Mayopoulos said he was stunned when Bank of America fired him in December 2008 and told him to leave immediately, The Charlotte Observer reported at the time.
He was the bank’s top lawyer during its negotiation to buy Merrill Lynch for $50 billion at the height of the financial crisis in September 2008. Mayopoulos gave prepared remarks to a House committee examining the bank’s purchase of Merrill Lynch and the accompanying $20 billion federal loan.
His termination came in December 2008, nine days after he advised the bank that it didn’t have the grounds to back out of its bid for Merrill Lynch despite that company’s mounting losses, the Observer reported.
Mayopoulos testified that he was in a meeting on Dec. 10, 2008, planning how to merge the legal departments of Bank of America and Merrill, when his assistant interrupted him.
An HR representative was waiting outside his office. The rep immediately took his company ID card, company credit card, Blackberry and office keys, and told him he couldn’t take anything with him, Mayopoulos told the committee.
The HR rep escorted him out to the executive parking garage, and Mayopoulos said he drove home.
The Moynihan connection
It wasn’t clear at the time if the advice about Merrill got Mayopoulos fired or if it was an executive drama involving Brian Moynihan, the current CEO of Bank of America, the Observer previously reported.
In fact, Moynihan came close to leaving the bank in late 2008 and Bank of America even prepared a news release announcing the departure, according to 2010 court filings, the Observer reported at the time.
Moynihan, who became CEO in January 2010, likely wouldn’t have gotten the job if he’d left the bank in December 2008, according to the Observer archives. He was head of the investment bank at the time, but would have lost the job to Merrill Lynch CEO John Thain after Bank of America closed on its purchase of Merrill, the Observer reported.
According to the 2010 court filings, the bank even prepared a draft news release announcing Moynihan’s departure. But after several board members objected, CEO Ken Lewis and another bank executive offered Moynihan the general counsel job. The bank fired Mayopoulos the next day, the Observer reported.
Romantic relationship headlines
In 2016, Mayopoulos made headlines of a different sort.
Fifth Third Bancorp fired its general counsel, a former lawyer for Bank of America, because of her romantic relationship with Mayopoulos, The Wall Street Journal reported at the time.
Mayopoulos, who was 57 and separated from his wife, disclosed the relationship to Fannie Mae’s compliance and ethics office in March 2016, according to The Wall Street Journal.
In a statement to the Observer at the time, Fannie Mae said Mayopoulos disclosed the relationship to the company’s office of compliance and ethics, and that its CEO followed the office’s guidance.
Mayopoulos “has no involvement in Fannie Mae’s relationship with Fifth Third Bank,” according to the statement.
More about Mayopoulos
Until recently, Mayopoulos was president of a Silicon Valley-based software firm that provides technology to financial institutions to serve consumer banking customers. He led digital mortgage platform Blend, Reuters reported in 2021.
“I know how important Silicon Valley Bank has been and continues to be to the success of its clients and the innovation ecosystem,” he wrote on the bank’s website.
Mayopoulos said the bank was “doing everything we can to rebuild, win back your confidence, and continue supporting the innovation economy. We recognize the past few days have been an extremely challenging time, and we are grateful for your patience.”
(Charlotte Observer business editor Adam Bell contributed to this report.)
