Erez Law Investigating Losses in First Republic Securities with First Republic Bank Stock

Erez Law is currently investigating First Republic Securities brokers who recommended First Republic Bank stock to their customers.

Clients of First Republic Securities brokers who failed to disclose the risk of investing and if the recommendation to invest in First Republic Bank stock was unsuitable may have claims to recover their losses.

Brokers Who Recommended Unsuitable First Republic Bank Stock

Erez Law recently reported on brokers, including Theresa Allen and Sam Schoner, who recommended First Republic Bank stock and preferred stock to their retail customers without disclosing the numerous risks. It is reported that Hafize Erkan and Michael Selfridge also recommended the First Republic Bank stocks to their clients.

According to public records, a former client of Sam Schoner filed a FINRA arbitration claim, alleging $7,498,468 million in losses. The elderly clients alleged that they invested in First Republic Bank stock, which declined during the banking crisis in May 2023.

First Republic Bank Stock Investigation. Did You Lose Money?

Attention clients of First Republic Securities brokers who recommended investment in First Republic Bank stock which declined during the banking crisis in May 2023. Regulators seized First Republic Bank, and JP Morgan bought it. First Republic Bank was later shut down.

In March 2023, First Republic Bank filed for bankruptcy. As a result of the bankruptcy proceedings, many investors across the country lost virtually all of their investment in First Republic Bank stock and now may be able to file a claim with the Financial Industry Regulatory Authority (FINRA).

In May 2023, the California Department of Financial Protection and Innovation took over First Republic Bank after determining that it was conducting its business “unsound manner.” The California regulator appointed the Federal Deposit Insurance Corporation (FDIC) as the bank’s receiver. This followed the collapse of regional partner Silicon Valley Bank.

According to CBS News, before entering receivership, “First Republic shares had lost 97% of their value since year start, wiping out more than $21 billion off First Republic’s market value.”

According to a Material Loss Review of First Republic Bank from November 2023, “the FDIC missed opportunities to take earlier supervisory actions and downgrade First Republic Bank component ratings consistent with the FDIC’s forward-looking supervisory approach; The FDIC assessed First Republic Bank’s uninsured deposits consistent with FDIC policies, but the magnitude and velocity of uninsured deposit outflows warrants the FDIC’s re-evaluation of assumptions and guidance pertaining to uninsured deposits; and First Republic Bank was well-capitalized throughout each examination cycle based on defined capital measures, but that the bank’s failure may warrant changes to the guidelines establishing standards for safety and soundness, including the adoption of noncapital triggers requiring regulatory actions.”

According to the findings, the firm failed due to “contagion effects stemming from the failure of other prominent financial institutions, which led to a run on deposits, significantly reducing its liquidity and exposing vulnerabilities in First Republic’s business strategy.”

The bank allegedly attracted high net-worth customers with “competitive loan terms, and funding growth through low-cost deposits, resulted in a concentration of uninsured deposits while increasing the bank’s sensitivity to interest rate risk in a rising rate environment,” which led to declines in its portfolio that limited its ability to “obtain sufficient liquidity and prevented its recovery.” In April 2023, the stock reached $2.98 per share.

In June 2023, the Office of the Inspector General of the Federal Deposit Insurance Incorporation (FDIC) recorded a final estimated loss to the Deposit Insurance Fund of $15.6 billion.

Contact Our Firm to Start a First Republic Bank Stock Lawsuit

Pursuant to FINRA Rules, member firms are responsible for supervising a broker’s activities during the time the broker is registered with the firm. Therefore, First Republic Securities may be liable for investment or other losses its customers suffer.

Erez Law represents investors in the United States for claims against brokers and brokerage firms for wrongdoing. If you have experienced investment losses, please call us at 888-840-1571 or complete our contact form for a free consultation. Erez Law is a nationally recognized law firm representing individuals, trusts, corporations and institutions in claims against brokerage firms, banks and insurance companies on a contingency fee basis.