Cetoex News – The US Securities and Exchange Commission (SEC) is launching an investigation into First Republic Bank executives over allegations of insider trading. Moreover, Bloomberg reported that the investigation is observing the conduct of executives prior to the bank’s seizure and subsequent sale to JP Morgan Chase & Co. 

The SEC is specifically investigating whether members of its executive team improperly traded using inside information. Additionally, two people familiar with the matter disclosed the existence of the investigation and its content. 

SEC Probe First Republic Insider Trading Claims

The fall of First Republic Bank was one of many bank failures that have been observed this year. Moreover, the determination followed a similar fate for both Silicon Valley Bank and Signature Bank. Conversely, the SEC seems to be launching an investigation into First Republic Bank executives over claims of insider trading. 

Specifically, the US regulator is conducting a probe regarding the validity of trades made by executives using insider information. However, there is no signal as to which executive members are the subject of the probe that was revealed today. 

Representatives for both JP Morgan, and the SEC have refused to comment at this point. Alternatively, First Republic was sold to the bank following its seizure by the US government on Monday. Subsequently, the sale arrived after a period of tremendous losses that faced the financial institution over the last week. 

Similarly, the SEC is conducting similar investigations into trading activity that took place at Silicon Valley Bank. Moreover, that investigation is regarding the collapse that took place in March. 

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Cetoex News – First Republic Bank has continued its downward spiral, as shares have fallen another 37% today. Moreover, the plummeting price continues as rumors of a potential government rescue deal persist. Specifically, US officials are reportedly in talks to commence an urgent rescue of the troubled bank.

Shares of First Republic Bank are down approximately 96% since the start of the year. Additionally, Fox Business reported that the stock had fallen more than 50% at midday trading and more than 70% since last month. 

First Republic Bank Fall Continues

A month after a budding banking crisis began in the US, one financial institution is on the brink of collapse. Specifically, First Republic Bank has continued its descent, falling another 37% today. Ultimately falling more than 96% since the start of 2023. 

The development arrives as US government officials have been in “urgent talks” over a potential rescue deal. Additionally, government interference has persisted as the bank itself has been attempting to set in motion a solution to its fading prices.

It was reported that the Federal Deposit Insurance Corporation (FDIC), the Treasury Department, and the Federal Reserve spoke about potential rescue efforts. Moreover, it was expected that the bank would enter FDIC receivership as it continued its fall. 

Alternatively, the government took similar action regarding various banking closures that occurred earlier this year. Conversely, the shutdown of Silicon Valley Bank and Signature Bank, where the first banking closures set off concern over a potential crisis in the sector. Moreover, that shutdown signified the largest banking closures since the 2008 financial crisis. 

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Cetoex News – First Republic Bank ($FRC) is expected to be seized by the US government, a report by Fox Business Network says. According to Fox’s Charles Gasparino, bankers working with First Republic say that they expect eventual government receivership for the ailing bank. This will come after it exhausts private sector solutions such as asset sales and finding a buyer, both of which “appear difficult.”

First Republic lost more than 40 percent of its deposits, approximately $72 billion, in the first quarter of this year. Its shares sank nearly 50 percent as of end-Tuesday. This is according to a Monday announcement by the bank.

The bank has seen record drops over the past month and a half, particularly since the Silicon Valley Bank was closed in March. Multiple big banks have also struggled, however, it looks like First Republic will be falling into the hands of the US government soon.

Fox Business’ Charles Gasparino also adds:

“Officials at the big banks believed the Fed was poised last week to take over FRC just before its earnings announcement crushed shares.”

The seizure is not final yet, however, it is very likely to occur according to Gasparino. Shareholders are also suing First Republic as of yesterday. They accuse the bank of concealing how rising interest rates impact business models by prompting an exodus of deposits.

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