After the second largest bank failure in history, the U.S. Securities and Exchange Commission (SEC) is reportedly investigating First Republic Bank executives for allegedly engaging in insider trading. Two sources have claimed that the securities regulator is scrutinizing the bank’s executives for making trades using confidential information. Although the sources have not named any specific individuals under investigation, they assert that the SEC is looking into the matter. Furthermore, reports indicate that U.S. lawmakers sold shares of the troubled bank before it collapsed and was acquired by JPMorgan Chase.
Securities Watchdog Investigates First Republic Execs
On May 1, 2023, the California Department of Financial Protection and Innovation (DFPI) took control of First Republic Bank, a San Francisco-based financial institution, and placed it under the receivership of the Federal Deposit Insurance Corporation (FDIC). With $229 billion in assets, this was the second largest bank failure in U.S. history, following the 2008 collapse of Washington Mutual (Wamu).
In the wake of the First Republic Bank’s collapse, Sabrina Willmer and Austin Weinstein, reporters for Bloomberg, revealed that “two people familiar with the matter” disclosed that the Securities and Exchange Commission (SEC) is investigating the bank’s executives for potential insider trading schemes. This development comes on the heels of the SEC’s investigation into the executives of Silicon Valley Bank, whose failure resulted in the third-largest bank collapse in U.S. history.
According to Willmer and Weinstein, when they reached out to the SEC and JPMorgan Chase for comment on the alleged investigation into First Republic Bank, representatives from both entities “declined” to provide a statement. The sources who disclosed the investigation did not identify any specific executives from First Republic, and the reporters emphasized that no one from the bank has been accuse
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Author: Jamie Redman
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