JPMorgan must face lawsuit by Ray-Ban maker over US$272m cybertheft

NEW YORK, Jan 5 — JPMorgan Chase & Co JPM.N was ordered by a New York judge to face a lawsuit by the French maker of Ray-Ban sunglasses, which said cybercriminals withdrew US$272 million (RM1.1 billion) from its New York account after the bank ignored “red flags” of suspicious activity.

US District Judge Lewis Liman on Wednesday ruled that a Thailand unit of EssilorLuxottica SA ESLX.PA can try to prove that JPMorgan violated a New York law governing commercial contracts that requires refunds of unauthorised payment orders.

Essilor said warning signs of fraud included transfers being made in whole-dollar amounts and through small banks going to unfamiliar entities associated with coffee, furniture and hair care instead of the optical industry.

The company, based in the Paris suburb of Charenton-le-Pont, has said that it was unable to recover US$100 million of the transfers, which were made in the fourth quarter of 2019. Its lawsuit seeks unspecified damages.

Liman in a 39-page decision rejected JPMorgan’s claim that the Essilor unit had “authorised” the transfers because the bank had received two approvals for each transfer and as a result followed the required security procedures.

The judge also dismissed a breach of contract claim but said Essilor can try to revive it, and dismissed a negligence claim because JPMorgan had no duty outside its account agreement to monitor and prevent overdrafts.

JPMorgan declined to comment on Thursday. Essilor and its lawyers did not immediately respond to requests for comment. — Reuters


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