First Republic Bank, Auditor KPMG Targeted in Investor Suit (1)

First Republic Bank and its auditor KPMG were sued by shareholders over alleged misstatements ahead of last month’s regional-banking crisis.

The lawsuit, filed Monday in San Francisco federal court by a Florida-based public pension fund, appears to be first targeting the bank since it was crushed in early March by unprecedented outflows. First Republic, its executives and its auditor are accused of repeatedly overstating the safety of its business model even as rising interest rates undermined the value of the bank’s loan and securities portfolios.

First Republic is slashing its workforce, shrinking its balance sheet and pursuing strategic options ...