Valent Projects

Disinformation destroyed a healthy bank – and nobody noticed

By valent-projects
Brand new research identifies First Republic Bank as the first known healthy bank to have been successfully targeted by online disinformation
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Data from Valent Projects reveals that First Republic Bank, the second largest American bank to fail in history, was targeted by an online manipulation campaign during which short positions dramatically increased. Just a few months later, the bank collapsed.

The bank knew that social media had been filled with concern over their future after Silicon Valley Bank collapsed; First Republic Bank, another regional bank in the United States, immediately began to feel the ripple effect and their CEO lately revealed to House lawmakers that “overnight, everything changed.” The bank, he stated, became “contaminated” by a sudden wave of panic.

But that panic wasn’t real. Using Ariadne, Valent identified an extensive network of bots and fake accounts actively steering social media discourse. This uptick in bot activity, aggressively amplifying negative narratives, coincided with an increase in short positions against the bank.

“First Republic Bank crashed despite there being no significant change to its fundamentals. The only thing that changed was the way it was perceived, and how those perceptions were manipulated to cause depositors to pull $100bn in just a few weeks,” said Amil Khan, CEO of Valent Projects.

Fergus McKenzie-Wilson, CTO of Valent Projects, said: “The response capabilities of bank officials and regulators are being outpaced by bots, fake accounts, and the invisible forces orchestrating them. The story of First Republic Bank is a warning to the financial sector; strong fundamentals are not the guarantee they once were.”

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Editorial by Amil Khan (amil@valent-projects.com

Data Analysis by Fergus McKenzie-Wilson (fergus@valent-projects.com


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