Do banks have a responsibility to intervene in a potential wire fraud?
It really depends on the circumstances whether or not a bank has the obligation to do something affirmative if it sees suspicious activity.
Now, there’s no question that a bank has and obligation to report suspicious activity – that’s federal law. Banks are very highly regulated, and they must report it.
But it’s a thorny question. It’s a trickier question as to what those obligations are, and it really is dictated by the facts and circumstances.
If, for example, the bank has very clear evidence that there’s fraud going on and it has the last clear chance to stop that wire fraud and it doesn’t, the bank is putting itself in jeopardy to be exposed to some very large liability for those actions.
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