Democrat Exposed Selling Stock In Failing Bank Right Before Gov't Seizure — Bought Shares in Buyer J.P. Morgan

Congresswoman Lois Frankel (D-FL) became mired in controversy Wednesday when reports revealed that she sold shares in First Republic Bank as the price plunged in the lead-up to its seizure and forced sale to J.P. Morgan by federal regulators.

According to The Daily Caller, the transactions were revealed by disclosure forms showing Frankel selling an unspecified amount between $1,001 and $15,000 of First Republic on March 16th. The congresswoman subsequently purchased between $1,001 and $15,000 six days later on March 22nd. The outlet reported that the transactions were recorded as mandated by the Stop Trading on Congressional Knowledge (STOCK) Act of 2012.

Initial reporting from Unusual Whales described Frankel's seemingly prescient and adroit financial moves. "Another Congressman literally traded banking stocks again. Lois Frankel sold $FRC on March 16th, avoiding the remaining 80% drop. She THEN BOUGHT $JPM, the bank buying FRC on March 22nd."
 

BREAKING NEWS: Another Congressman literally traded banking stocks again.

Lois Frankel sold $FRC on March 16th, avoiding the remaining 80% drop.

She THEN BOUGHT $JPM, the bank buying FRC on March 22nd.

— unusual_whales (@unusual_whales) May 1, 2023
 

Frankel's First Republic stocks were a sub-holding within a Morgan Stanley IRA account managed by MFS Investment Management as reported by Daily Caller. The JPMorgan holdings are under another Morgan Stanley IRA overseen by Anchor Capital Advisors LLC. 

According to a spokesman for Frankel speaking to Daily Caller News Foundation, "My account is managed independently by a money manager who buys and sells stocks at his discretion."
On Monday in the pre-dawn hours, regulators from the federal government took over First Republic Bank, seizing it only to sell it by force to J.P. Morgan in a purchase financed by the FDIC. 

JPMorgan said in a press release Monday that key elements in the "competitive bidding" put on by the FDIC included,

• "Acquisition of the substantial majority of First Republic Bank’s assets, including approximately $173 billion of loans and approximately $30 billion of securities
• Assumption of approximately $92 billion of deposits, including $30 billion of large bank deposits, which will be repaid post-close or eliminated in consolidation
• FDIC will provide loss share agreements covering acquired single-family residential mortgage loans and commercial loans, as well as $50 billion of five-year, fixed-rate term financing 
• JPMorgan Chase is not assuming First Republic’s corporate debt or preferred stock"

Jamie Dimon, Chairman and CEO of J.P. Morgan Chase said, "This acquisition modestly benefits our company overall, it is accretive to shareholders, it helps further advance our wealth strategy, and it is complementary to our existing franchise."

That said, as a shareholder of JPMorgan Chase, the congresswoman would enjoy the 'modest benefit' and 'accretion' as well.

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