Update: The Fabulis story had legs like I’ve never seen before. When I posted it to Hacker News it shot to number 1 in about 3 minutes and stayed there for 6 to 8 hours. A few hours later Robin Wauters from Techcrunch picked up on the story and since then it’s appeared everywhere from GigaOm and ValleyWag to FT.com. Citi has now issued a formal apology to Fabulis emphasizing their support of the LGBT community which you can read here.
Update2: Jason posted this update about 4 hours ago with some additional rather startling detail. “Yesterday I was even instructed to come into the branch to view a print-out of the “offensive” content on our site which was in “violation” of their compliance officer’s review of our business account.”
My original post follows:
In an utterly bizarre move, according to the Fabulis blog, Citibank blocked Fabulis.com’s bank account a few days ago for “objectionable content on their blog”. To give you some context, Jason Goldberg the Founder & CEO is a good friend of mine and started his career working for Bill Clinton in the White House. He then went on to T-Mobile, picked up a Stanford MBA on the way, raised $50M for Jobster which ended up buying my job search engine, then founded SocialMedian (sold to Xing) and is now working on Fabulis.
Fabulis is based in NY but Jason is still known and loved by the Seattle startup community and we may one day even forgive him for going to the east coast.
The company is still finding their niche but it looks like they’re setting up to be a travel portal for gay men. Their blog has had a ton of hilarious videos of guys describing why they’re “Fabulis”. Zero porn, nothing even mildly suggestive or risque.
Just to be completely clear, we’re not talking about refusing a line of credit here. This is a cash account belonging to a funded company that was blocked.
I haven’t had a chance to speak to Jason about this yet, so I don’t have any more detail. But after Fabulis called Citi this evening they temporarily lifted the block while “a compliance officer is asked to re-review our website on Thursday”.
I’m curious why a bank would think they have the right to block a depositor’s access to their own funds based on that banks own moral judgment. Unless I’ve misunderstood the facts, this sets a very dangerous precedent.
Banks are highly motivated to hold on to your money as long as possible. If they have this power, it is very profitable for them to use it because they earn interest on your money every additional day it stays in your account. Ever heard of the overnight rate?
After their $45 billion dollar public money bailout of Citigroup in 2008 it’s ironic that they would block the bank account of a technology startup who’s goal is to create jobs.
Whatever the reason, I hope Citi’s PR team is kicking into gear because Jason is no stranger to mainstream media (CNN video) and this seems like the sort of thing that that will get picked up.