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 San Francisco-bank’s shares plummeted 70 percent this week, but First Republic secured a lifeline Thursday as major banks J.P. Morgan Chase, Wells Fargo, Bank of America, and others agreed to a $30 billion rescue plan with the struggling bank.
The bank had been exploring a potential sale or infusion of cash, Bloomberg first reported on Wednesday, as it looks to stay afloat.
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 already secured $70 billion in liquidity from the federal reserve and JPMorgan Chase on Sunday on top of emergency funding.