Door to Increased Liability for Banks Opened by U.S. Court of Appeals for the First Circuit

[author: Kristen J. Mathews]

The United States Court of Appeals for the First Circuit has opened the door to increased liability for banks when hackers make fraudulent withdrawals. In Patco Construction Co., Inc. v. People's United Bank, the Court held that Ocean Bank, a division of People's United Bank, failed to establish "commercially reasonable" measures to prevent six fraudulent withdrawals from an account held by a local business. This alert provides an analysis of this significant decision and its potential implications for financial institutions.

 

Published In: Civil Procedure Updates, Civil Remedies Updates, Finance & Banking Updates, Privacy Updates, Science, Computers & Technology Updates

DISCLAIMER: Because of the generality of this update, the information provided herein may not be applicable in all situations and should not be acted upon without specific legal advice based on particular situations.

© Proskauer - Privacy & Data Security | Attorney Advertising

Don't miss a thing! Build a custom news brief:

Read fresh new writing on compliance, cybersecurity, Dodd-Frank, whistleblowers, social media, hiring & firing, patent reform, the NLRB, Obamacare, the SEC…

…or whatever matters the most to you. Follow authors, firms, and topics on JD Supra.

Create your news brief now - it's free and easy »