The SEC Is Possibly Investigating 'Conduct' Of Former First Republic Executives Prior to JP Morgan Sale The probe is allegedly looking into whether then-executives of the now-failed bank "improperly traded on insider information."

By Madeline Garfinkle

Anadolu Agency | Getty Images

The Securities and Exchange Commission is allegedly investigating First Republic executives to determine whether they "improperly traded on insider information" prior to the bank's failure and subsequent sale to JP Morgan Chase, two individuals familiar with the matter told Bloomberg.

The individuals chose not to be identified since the investigation has not been made public. No former or current individuals working at the bank have been accused of misconduct, and it remains unclear which executives are the focus of the probe.

"That the SEC is looking into First Republic is no surprise," Richard Hong, a former SEC trial attorney told Bloomberg. "My expectation is that the SEC will be looking at a variety of issues regarding insider trading and disclosures."

The news of the investigation came one day after U.S. Senator Elizabeth Warren accused First Republic executives of "incompetency" and "mismanagement" in a letter to First Republic Bank's former CEO Michael J. Roffler.

Related: 8 Social Media Influencers Charged by SEC in $100 Million Stock Manipulation Scheme

"You owe your customers and the public an explanation for the decisions that resulted in the costly failure of your bank – the second largest bank failure in the nation's history," Warren wrote in the letter.

First Republic collapsed on May 1 and was acquired by JP Morgan Chase the same day for $10.6 billion.

As for the state of the alleged probe, an SEC spokesperson stated that the organization "does not comment on the existence or nonexistence of a possible investigation."

Representatives for JP Morgan did not immediately respond to Entrepreneur's request for comment.

Related: Breaking the Bank: America's Multi-Trillion Dollar Banking Problem

Madeline Garfinkle

Entrepreneur Staff

News Writer

Madeline Garfinkle is a News Writer at She is a graduate from Syracuse University, and received an MFA from Columbia University. 

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