Manufacturer sues JPMorgan after ignoring $272m red flags of suspicious activity
Essilor Manufacturing has sued JP Morgan, alleging the bank ignored suspicious activity, culminating in cybercriminals stealing $272m.
According to reports, the French manufacturer of Ray-Ban sunglasses claimed the bank failed to notify it of suspicious activity in its New York bank account.
In papers filed at a federal court in Manhattan, the manufacturer said:
- There was a huge increase in the volume of money transacted,
- As well as money being sent to shell companies in countries seen as high-risk.
Essilor Manufacturing said.
- "The fraudulent transfers were all made in round dollar amounts (i.e., no cents), which was a dramatic departure from prior periods where round dollar transfers were relatively infrequent,"
According to a Bloomberg report, Essilor has recovered all but $100m of the stolen money, an amount it said was
- "Costly and burdensome".
JP Morgan is one of the world's biggest banks, with a huge IT budget.
Speaking at a recent event, Ziv Gafni, who is head of digital strategy, fintech and markets innovation at JP Morgan, said the bank invests about $12bn a year in technology.
A large proportion of any bank's IT spend goes on security, but criminals still find their way around defences.
Gareth Lodge, analyst at Celent, said banks could build trust by improving activity monitoring.
- "There is an opportunity for banks to differentiate, by doing extra checks, providing training etc.
- Given how widespread [the problem] is, it should also be something banks should work together on."
Rik Turner, cybersecurity analyst at Omdia, said he is not surprised.
- "The US is a very litigious society, and breaches have led to lawsuits before. I think there have even been some class actions representing many hundreds of individual customers. There have certainly been plenty of lawsuits against retailers etc."
- "I don't actually remember a lawsuit specifically against a bank for a breach, but it seems perfectly logical that such action should be taken, and indeed, I would expect to see even more of this going forward."
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