Thursday, October 13, 2011
A law firm that was scammed by a Hong Kong company that had e-mailed the firm purportedly to seek representation sued two banks when they lost nearly $200,000. The scam involved receipt of a $10,000 retainer and the remitting of $197,500 to the "client."
The law firm claims that a partner was told be a bank employee that an incoming check had "cleared." In reliance, he wired out $187,500. The incoming check was a counterfeit. By the time the bad check was discovered, the law firm had been fleeced.
The New York Court of Appeals (over a dissent) affirmed the entry of summary judgment to the banks. The dissent would allow a claim of negligent misrepresentation to proceed. The justice would find a triable issue in the "check cleared" assurance.
A cautionary tale here. (Mike Frisch)