JP Morgan Chase Bank must face a lawsuit by a unit of the French maker of Ray-Ban glasses that claims the bank ignored suspicious transactions as crooks drained $272 million from the company’s New York bank account.
Essilor Manufacturing, which operates a plant in Thailand for the international eyewear company EssilorLuxottica, sued the bank in April in a federal court in New York. It claimed JP Morgan was aware of a pattern of fraudulent transactions that led to the theft.
The sunglasses maker said in the complaint that the cybercriminals made 243 fraudulent payments and pulled out $272 million from the account.
According to Essilor Manufacturing, JP Morgan failed to notify the company, despite multiple red flags. For example, there was a jump in monthly dollar volume and the movement of money to shell companies at regional banks, often in high-risk jurisdictions.
Daily transfers from the NY account were supposed to be capped at $10 million but sometimes exceeded this "by more than $20 million," the complaint added.
Now, US District Judge Lewis Liman dismissed claims of breach of contract and negligence against JP Morgan on Wednesday. But he said that Essilor Manufacturing could go forward with a claim under a New York contract law provision that requires banks to refund unauthorized payment orders from a customer.
Even though the judge dismissed a similar claim by Essilor International, a French parent firm, he also said the companies could file an amended complaint with redrafted breach of contract claims.
Essilor Manufacturing said it recovered all but $100 million of the stolen funds “through a costly and burdensome process.” It’s seeking compensatory damages to be determined at trial.
The company said that the money was stolen in a “complex fraud orchestrated by international cybercriminals” in 2019. Just months after the transfers, Essilor said it had been the victim of a malware attack on its group servers and computers.
The company claimed to have isolated the infected servers and installed software patches "with the support of leading external antivirus experts."
A spokeswoman with the Franco-Italian eyewear group told Reuters at the time: "The malware is a new type of virus. Essilor took immediate action to prevent the spread of the malware."
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