1st Circ. Opens Door To Bank Liability For Cyberattacks

Law360, New York (July 6, 2012, 8:51 PM EDT) -- In reviving a suit seeking to hold People's United Bank liable for funds fraudulently withdrawn from an account, the First Circuit has raised the bar for banks to prove their security procedures adequately protect customers from unauthorized electronic transfers and exposed the institutions to more lawsuits, experts said Friday.

Reversing the lower court's grant of summary judgment in favor of the banks, a three-judge panel found that People's United, previously known as Ocean Bank, had failed to establish “commercially reasonable” measures as defined by Article 4A...
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