First Republic Investment Management and First Republic Securities representatives allegedly gave false and misleading information about First Republic stock in the days leading to the bank’s collapse.
On March 10, 2023, First Republic Investment Management and First Republic Securities representatives sent their investors a notice about First Republic Bank. The notice stated that the bank was still in a “very strong position.” The body of the notice states that the deposits are “strong” and “diversified” and the “liquidity and capital remain strong.” The notice goes on to state that stock was undervalued because “the stock market has tended to have a spill-over effect on our share price, as well as those of a lost of other banks.”
The notice was strange because First Republic Bank and the First Republic securities arms were separate corporate entities. Unlike the bank, the securities entities were not experiencing a run on their assets. Unlike the bank, the securities arms were not facing an issue with deposits.
The rosy picture of the bank was not accurate and did not disclose relevant information in its possession. First Republic Investment Management is a registered investment adviser and has the duty to make full disclosure and to act in the best interests of its investors. It violated this duty by failing to give the investors a true warning.
The notice seems strange until you realize that the representatives were paid largely in bank stock. All areas of the organization were given discounts and encouraged to purchase the stock.
Also undisclosed in the plea to purchase First Republic stock was that bank and Asset Management insiders were selling shares. The Wall Street Journal published an article a few days after the communications disclosing how the top executives unloaded $11 million in First Republic shares in the time just prior to the collapse of the bank’s stock.
Given these issues, we are currently investigating the matter and wish to speak to those who invested in First Republic Bank. The existing class action suits do not seek recovery from First Republic Investment Management or First Republic Securities.
We have represented investors for over 20 years. Please call us toll-free at the number above and we can discuss options you may have to recover your losses.