Executives of mid-size bank First Republic reportedly sold millions of dollars of company stock in the months leading up to the financial institution’s stock crash amid the Silicon Valley Bank implosion.
The news comes as the San Francisco-based bank explores a potential sale, which Bloomberg first reported on Wednesday, after First Republic’s shares plummeted by 70 percent. It also comes as the U.S. government is attempting a rescue plan with major banks J.P. Morgan Chase, Bank of America, and Morgan Stanley in tow.
But on March 6, two days before the banking sector crisis, the bank’s chief risk officer sold company stock, The Wall Street Journal reported. And since the beginning of the year, insiders have sold almost $12 million in company stock, including Executive Chairman James Herbert II, who has sold $4.5 million worth of shares.
The bank’s president of private wealth management, Robert Thornton, made the largest sale of the year on Jan. 18, dropping 73 percent of his shares—totaling $3.5 million. Before that, he hadn’t traded since 2021.
None of the filings by executives were indicated to be under 10b5-1 plans, essentially meaning none of them were pre-scheduled sales, according to government records. Insider sales at First Republic aren’t required to be made public by the SEC, unlike most companies. First Republic reports trades to the Federal Deposit Insurance Corporation.
In the wake of the company’s stock collapse, First Republic secured $70 billion in liquidity from the federal reserve and JPMorgan Chase on Sunday on top of emergency funding.
Details of the “rescue plan” orchestrated by the federal government aren’t yet public, but could be revealed as early as Thursday.
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