Cybertheft victim sued by bank
June 8, 2010 by Sam NarisiPosted in: In this week's e-newsletter, Latest News & Views, Regulations & Compliance
You’re a bank, and faulty security measures result in a customer’s account being hacked. What do you do? Apparently, you sue the customer.
Texas-based PlainsCapital Bank recently sued Hillary Machinery, Inc., a business customer, after criminals hacked into Hillary’s account and stole more than $800,000.
The bank recovered about $600,000 of that money. Hillary sent a letter demanding PlainsCapital pay the difference, claiming the bank’s lack of proper security measures was to blame for the theft.
PlainsCapital promptly filed a suit against Hillary. The accusation: Well, there was no accusation, really. The bank was trying to get the court to confirm that its security was adequate.
Hillary filed a countersuit to recover the funds, arguing the bank should never have allowed the suspicious transfer to happen. Given the facts of the case, it’s hard to disagree:
- The accounts receiving the cash were located in Eastern Europe, which should have been red flag,
- Hillary had previously only transferred money to a few other accounts, but the theft involved moving huge sums to multiple accounts within 48 hours, and
- E-mails authorizing the transfer came from Romania, even though Hillary is based in Texas.
Who won the case? We may never know the real outcome. The two sides recently settled, but, as ComputerWorld reports, would not disclose any details.
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Tags: bank, cybertheft, Hillary Machinery, lawsuit, PlainsCapital
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