First Republic executives are facing a regulatory probe in Massachusetts over their selling of shares in the run up to its recent struggles.
The state’s secretary of the commonwealth, William Galvin said First Republic had been ordered to court, as his office seeks details of its insider trading policies.
Executive officers will face scrutiny over how they handled their stock sales in the firm from January 1 this year, he told Reuters.
The lender was hit particularly hard by the collapse of Silicon Valley Bank (SVB) on March 9, prompting 11 banks to grant it US$30bn in support, including JPMorgan Chase & Co (NYSE:JPM), Bank of America Corp (NYSE:BAC) and Citigroup Inc (NYSE:C).
Though support looked to prop up its ability to manage short-term deposit activity, it was not enough to prevent significant downgrades by S&P and Moody’s, which pointed to the First Republic's long term issues and “high liquidity stress”.
Executives from SVB and failed peer Signature Bank are also facing regulatory probes, as government officials look into any potential mishandling prior to the pair being rescued earlier this month.