July 3, 2012). The First Circuit Court of Appeals held the bank potentially liable for its corporate customer’s losses after hackers intruded into the computer systems, stole the customer’s bank account access security information, and used that information for effecting unauthorised funds transfers from the customer’s account.
In seven days, nearly $ of fraudulent wire transfers were made from Patco’s account by the time the fraud came to light. The Court found the bank’s security procedures were not “commercially reasonable” under Article 4A of Uniform Commercial Code.