Janet Yellen, Biden’s Treasury secretary, made a joint statement with the heads of the Federal Reserve Bank and Federal Deposit Insurance Corporation Thursday. It announced that approximately $30 billion would be deposited by 11 large banks into First Republic Bank to stabilize the bank’s balance sheet following its stock crash last week.

This bailout, which was approved by the Biden administration, is meant to boost depositors’ confidence. However, a new report has shown that First Republic’s executives have done little in recent weeks to inspire doubt.

The Wall Street Journal reported last week that the bank’s top executives had sold millions of shares of their company before it crashed.

It is not clear if First Republic executives sold off stock in the belief that there was trouble ahead. They sold off and gave away a large amount of stock at a time when the share price was over $100.

Due to two credit downgrades, the First Republic stock price fell as low as $19.80 this week. The price climbed to $34.35 at market close after the Fed and Treasury jointly issued a statement.

James Herbert II, former Rep. Liz Cheney (R.Wyo.), was the bank’s executive chair. He contributed thousands to her. In 2022, he is reported to have sold shares worth $4.5 million since January. According to FDIC filings, he sold 15,000 shares in February (when they were priced at $123.51).

The Journal reported that Herbert sold 7% and 5% respectively of his stock holdings in the most recent stock dumps.

Robert Thornton, First Republic’s President of Private Wealth Management, sold 73% of his outstanding shares for $3.5 Million on Jan. 18, his first trade in nearly two years.

Michael Roffler was the bank’s chief executive officer. He had previously sold $1.3 million in November 2022.

David Lichtman, the bank’s chief credit officer has already sold off $2.5 Million worth of assets in 2023. This includes a March 6 sale, just days before Silicon Valley Bank started teetering.

The New York Post reported that Lichtman and his wife sold shares worth $2.5 million last year.

According to the report, “Insiders have sold $ 11.8 million worth of stock this year at prices that average just below $130 per share.” “The bank’s chief financial officer, president of private wealth management, and chief executive sold $7 million in stock together.”

The Journal claims the Journal reported that the executives traded largely unnoticed, in part because they did not have to report insider sales to the Securities and Exchange Commission. First Republic is the only company not listed on the S&P 500.

Despite their anonymity, trades were reported to FDIC.

According to reports, the sales of the executives were not made under 10b5-1 plans. This could lead to insider trading allegations.

Janet Yellen, Federal Reserve Board Chair Jerome Powell, and FDIC Chairman Martin Gruenberg said that First Republic’s bailout showed the “resilience of the banking system”.

In a corresponding statement, various banks involved in the bailout — including Bank of America, Citigroup, JPMorgan Chase, Wells Fargo, Goldman Sachs, and Morgan Stanley — said the action “reflects their confidence in the country’s banking system and helps ensure First Republic has the liquidity to continue serving its customers.”