SEC Probes First Republic Bank Executives for Insider Trading; Lawmakers Dump Bank’s Shares Before Collapse – Bitcoin News
After the second largest banking failure in history, the US Securities and Exchange Commission (SEC) is reportedly investigating First Republic bank executives for allegedly engaging in insider trading. Two sources alleged that the securities regulator is vetting bank executives for conducting trades using confidential information. Although the sources do not name any specific individuals under investigation, they do confirm that the SEC is looking into the matter. Moreover, reports indicate that US lawmakers sold shares of the troubled bank before it collapsed and was acquired by JPMorgan Chase.
The Securities Controller is investigating the Republic’s first CEOs
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 custody of the Federal Deposit Insurance Corporation (FDIC). With assets of $229 billion, that was it The second largest bank failure In the history of the United States, after the collapse of Washington Mutual (Wamu) in 2008.
In the aftermath of the collapse of First Republic Bank, Sabrina Wilmer and Austin Weinstein, correspondents for Bloomberg, open “Two people familiar with the matter” revealed that the Securities and Exchange Commission (SEC) is investigating bank executives for possible insider trading schemes. The development follows the SEC’s investigation of executives of a Silicon Valley bank, whose failure led to the third-largest bank collapse in US history.
According to Willmer and Weinstein, when they reached out to the SEC and JPMorgan Chase for comment about the alleged investigation into First Republic Bank, representatives for both entities “refused” to make a statement. The sources who revealed the investigation did not identify any specific First Republic executives, and the reporters confirmed that no one from the bank had been accused of any misconduct.
US lawmakers get rid of the first shares of the republic before the bank fails
In addition to the information provided by Willmer and Weinstein’s sources, several others reports It indicates that US lawmakers sold their shares in the First Republic before its collapse. During the First Republic Bank fallout, Florida Democrat Lois Frankel a statement She sold her shares in the bank before its collapse and instead invested in JPMorgan Chase. In an interview with CNN, Frankel explained that its shares are “managed independently by a money manager who buys and sells shares at his discretion.”
This is not the first time that US officials have been accused of selling stocks before the market crash. In the midst of the Covid-19 pandemic, many US Senators Accused of a violation of the Shares Act 2012. However, no charges were filed against the legislators and the cases were eventually closed. In a 2022 editorial, The New York Times mentioned That 97 members of the US Congress reported deals in companies that were “affected by its committees”.
What do you make of recent allegations of insider trading by First Republic Bank executives and reported stock selling by US lawmakers before the bank collapsed?
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