Emergence of the Mareva by Letter: banks' liability to noncustomer victims of fraud

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In this paper, leading practitioners in international fraud recovery from Canada, the United States, the British Virgin Islands, and Switzerland discuss the emerging liability of banks to non-customers and the ability to seek the freezing of assets by letter. The authors note that the issuance of a letter to a bank that provides sufficient particulars and evidence of fraud can, in certain situations, give rise to a de facto Mareva injunction. Accordingly, with the growth of fraudulent activity occurring through bank services, financial institutions ought to be prepared to investigate and be proactive in their assessment of the merits of a letter as an evidentiary foundation for knowledge of fraud and weigh the risks of compliance and non-compliance with a request to freeze customer accounts in appropriate circumstances. The authors argue that with the rising bank compliance with such letters, alongside the mounting legal responsibility for fraud prevention evident in the caselaw, the apparent benefits to fraud victims in utilizing a Mareva by Letter as the first step in recovering their assets must not be overlooked.

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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.

© Yves Klein, Monfrini Crettol & Partners | Attorney Advertising

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