Silvergate CEO Alan Lane has denied allegations of nepotism before U.S. senators, according to a report from The Wall Street Journal on Dec. 21.
Last month, on Nov.7, Silvergate Capital announced two changes to executive positions within the company. Unfortunately, it neglected to mention at that time that Lane’s son-in-law, Tyler Pearson, would be affected by the corporate shuffle.
Pearson formerly served as Chief Risk Officer at Silvergate but was reassigned to the deputy equivalent of that role during the shuffle. He now reports to Kate Fraher, who took on the role of Chief Risk Officer after previously serving as the company’s COO.
Lane denied that the change was due to any performance issues on Pearson’s part. Instead, he called the decision “a significant management restructuring unrelated to job performance,” adding that staff changes “extended well beyond Mr. Pearson.”
Silvergate is frequently accused of nepotism in the short-seller community, as the company employs at least two other immediate family members of Alan Lane. His son, Chris Lane, is employed by Silvergate in a lead business systems role. Alan Lane’s son-in-law, Jason Brenier, also serves as the company’s Director of Trading.
Three U.S. senators — including noted crypto critic Elizabeth Warren — first called for answers from Silvergate on these and other matters on Dec. 5.
The senators initially imposed today’s question in a letter that day: “Why did Silvergate replace Tyler Pearson as Chief Risk Officer?”
The question was tangentially related to the senators’ more significant concerns about Silvergate’s relationship with the bankrupt crypto exchange FTX. Silvergate carried out its executive shuffle the same weekend FTX began to collapse, seemingly leading the senators to suspect that it was related to the company’s FTX connections.
Yesterday, senators asserted that an account at Silvergate was at the center of FTX’s collapse based on its conversations with the former company. However, those conversations have produced few other concrete details on what may have occurred.