Compliance Bulletin

Employer Anti-Retaliation Law Strengthened
December 19, 2016

In a type of case that happens all too often, a lawyer was duped into accepting a large check, deposited it, and wired good funds to the perpetrator against the check, which was later determined to be fraudulent. In this case the bank that took the loss was the paying bank, which had reimbursed the owner of the account from which the bogus check had been drawn. The bank then sued the bank of deposit (the lawyer’s bank), the lawyer, and the Federal Reserve Bank through which the check was routed. The Federal Reserve Bank converted and presented the check as an electronic item under Check 21. The U.S. Seventh Circuit Court of Appeal affirmed that the paying bank could not prevail on its claims. The case is First American Bank v. RBS Citizens N.A. See CBA’s Regulatory Compliance Bulletin written by Ted Teruo Kitada, senior counsel with Wells Fargo Bank and chairman of CBA’s Legal Affairs Committee.