Jacobs v. Barclays Bank PLC

Background

Joshua Jacobs brought New York-law claims against Barclays Bank PLC for negligence, aiding and abetting fraud, and violating New York Uniform Commercial Code § 4-A-202. According to the complaint, in 2021 Jacobs communicated online with a person who claimed to have inherited a cocoa farm in Ghana. That person and another individual directed Jacobs to send money to two Barclays accounts in the United Kingdom. Jacobs made 13 wire transfers between August 31, 2021, and November 16, 2021, totaling $1,172,040.

After realizing he had been defrauded, Jacobs tried through counsel to obtain information from Barclays about the people who controlled the two accounts. He alleged that Barclays did not accept delivery of his letter on at least one occasion and did not respond. Barclays moved under Federal Rule of Civil Procedure 12(b)(6), which tests whether a complaint states a legally sufficient claim, to dismiss all three claims.

Rulings on the Claims

Jacobs conceded that his claim under New York Uniform Commercial Code § 4-A-202 should be dismissed, and the court dismissed that claim.

The court also dismissed the aiding-and-abetting-fraud claim. Under New York law, that claim required a primary violation, Barclays’ actual knowledge of the fraud, and substantial assistance in carrying it out. The court found that the complaint’s allegations about the size and frequency of the transfers, the transfers to both accounts on the same day, and the lack of a physical address for one account did not plausibly show actual knowledge. The court also found that providing ordinary banking services, including opening and maintaining accounts and processing wire transfers, did not amount to substantial assistance. Barclays’ alleged refusal to provide information after Jacobs reported the fraud likewise did not plausibly constitute substantial assistance or proximately cause Jacobs’s losses.

The court dismissed the negligence claim as well. A negligence claim requires a duty, a breach, and resulting injury. The court held that Jacobs was not a Barclays customer and that banks generally do not owe non-customers a duty to protect them from intentional wrongdoing by the banks’ customers. Barclays therefore owed Jacobs no duty to protect him from the alleged fraud.

Disposition

Judge Ronnie Abrams granted Barclays’s motion to dismiss, without prejudice. The court stated that Jacobs could amend his complaint within 30 days if he had a good-faith basis to do so. The Clerk was directed to terminate Barclays’ pending motion.