The Securities and Exchange Commission (SEC) is reportedly investigating whether there was insider trading at First Republic Bank.
The investigation focuses on trades that now-former executives made before the government seized the bank and sold it to JPMorgan Chase, Bloomberg reported Friday (May 5), citing unnamed sources.
The report added that the identities of the former executives are not known, that no one has been accused of wrongdoing and that the investigation could end with no accusations being made.
Reached for comment by PYMNTS, an SEC spokesperson said via email: “The SEC does not comment on the existence or nonexistence of a possible investigation.”
A spokesperson for JPMorgan Chase declined to comment on the report. First Republic Bank did not immediately reply to PYMNTS’ request for comment.
The report comes four days after First Republic Bank was sold to JPMorgan Chase after weeks of creeping to the edge of collapse.
Regulators seized control of the struggling lender over the weekend, with the Federal Deposit Insurance Corp. (FDIC) announcing Monday (May 1) that it had sold the bank to JPMorgan Chase.
The sale of First Republic to the country’s largest bank came after several weeks of uncertainty surrounding its future.
It was reported on March 15 that First Republic was considering a sale while also looking at other options for boosting its liquidity.
The bank had been downgraded days earlier by Fitch Ratings and S&P Global Ratings amid the ongoing turmoil in the banking sector.
That volatility began when regulators took over Silicon Valley Bank on March 10 following a run on deposits and when Signature Bank folded as well.
A day later, on March 16, JPMorgan, Bank of America and nine other banks made uninsured deposits totaling $30 billion into First Republic to ensure that it had the liquidity it needed.
About a month later, on April 24, First Republic said in its earnings report that its total deposits stood at $104.5 billion as of March 31, including the deposits received from the 11 large banks. That total was down from $176.4 billion on Dec. 31, 2022.
“With the closure of several banks in March, we experienced unprecedented deposit outflows,” First Republic Chief Financial Officer Neal Holland said at the time.