When NJ Banks Are Liable For 3rd-Party Fiduciary Breach

Law360, New York (January 29, 2013, 8:24 AM EST) -- Banks, broker/dealers and other financial institutions often are the subject of claims by noncustomer investors, businesses, and estate and trust beneficiaries asserting that the institution is responsible for defalcations involving checks committed by persons running investment schemes, employees of account holders with responsibility for company accounts, attorneys, trustees or executors.

The most common situations in which such claims arise involve corporate employees with responsibilities for corporate accounts, such as controllers and their assistants, or bookkeepers in smaller entities. In most cases, the bank or other institution...
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