Ecuador’s Banco del Austro and Wells Fargo have reached an out-of-court settlement over a 2015 cyber heist, and that suit could have an impact on a planned suit by Bangladesh’s central bank.
According to Reuters, Banco del Austro’s suit against Wells Fargo was quietly settled in February, less than a month before a trial date was set.
While neither could be reached for comment, Banco was seeking to hold Wells responsible for authorizing the fraudulent transfer of $12 million from its account in 2015.
This news could have a real impact on a potential suit stemming from a hack on Bangladesh Bank’s systems in early 2016, which tricked the Federal Reserve Bank of New York into sending as much as $81 million to accounts at Rizal Commercial Banking Corp (RCBC) in the Philippines.
The accounts were held in fake names, and most of the money disappeared into casinos in Manila. While some of the money has been recovered, around $66 million is still missing. As a result, Bangladesh Bank has threatened to sue RCBC.
“This is a tricky issue. We can’t reveal our strategy. But yes, we are reviewing each and every case, including the Ecuador one,” Bangladesh Bank’s deputy governor Abu Hena Mohd. Razee Hassan said in a recent interview.
Bangladesh has yet to take any legal action, but the suit by Banco against Wells Fargo was seen as a test for the options available to Bangladesh — with a settlement signaling that Wells compensated Banco in some way.
Still, experts say that it might be hard to prove that RCBC had a contractual obligation to freeze the stolen funds.
“There are an awful lot of reasons for people to settle, (and) there are all sorts of laws that may or may not apply,” said Peter Jaffe, a senior associate at the Washington branch of law firm Freshfields Bruckhaus Deringer LLP.
For its part, RCBC is ready to defend itself against a lawsuit, saying it has received advice from lawyers in the United States.
“There is no act attributable to RCBC which caused the loss or the theft from Bangladesh Bank,” it said in a statement. “We reiterate that RCBC was merely a beneficiary bank, meaning, the payment instructions which are alleged to have been the result of hacking were not executed by it.”