Cartier Saada S.A. v. Bank of America, N.A.

Background

Cartier Saada S.A. and its wholly owned subsidiary, Cartier Saada US LLC, sued Bank of America, N.A. The plaintiffs alleged that a hacker accessed the email account of Cartier Saada S.A.’s chief executive officer and redirected a customer’s payment to an account held by Cartier Saada LLC, an unrelated organization. The account had been opened at Bank of America. The plaintiffs alleged that the bank failed to verify the identity of the person who opened the account, allowing the fraud to occur.

The plaintiffs asserted claims for negligence, violation of customer-due-diligence requirements under the Bank Secrecy Act, and conspiracy. Bank of America moved to dismiss under Federal Rule of Civil Procedure 12(b)(6), which tests whether a complaint states a legally sufficient claim.

Negligence

The plaintiffs argued that Bank of America negligently failed to comply with federal regulations requiring financial institutions to verify the identities of people controlling legal-entity customers. Applying New York law, the court explained that banks generally do not owe non-customers a duty to protect them from intentional wrongdoing by the banks’ customers. The court rejected the plaintiffs’ argument that the newer identity-verification regulations changed that rule, reasoning that recognizing such a duty would improperly expand banks’ potential liability to the public generally. The court therefore dismissed the negligence claim.

Bank Secrecy Act

The court held that the Bank Secrecy Act does not provide a private right of action, meaning that a private party cannot sue to enforce the statute unless Congress created that authority. The identity-verification provision directs the Treasury Secretary to issue regulations but does not create an enforceable right for private plaintiffs. The court also held that regulations issued under the statute cannot create a private right that the statute itself does not provide. The court therefore dismissed the Bank Secrecy Act claim.

Conspiracy

Under New York law, conspiracy is not an independent tort; it can connect defendants’ actions to an underlying tort. The plaintiffs alleged that a Bank of America employee conspired with the owner of the account to defraud them and sought to hold the bank responsible for the employee’s conduct.

The court found that the complaint did not plausibly identify the alleged co-conspirator, allege facts showing an agreement to commit fraud or another tort, or show that the employee intended to advance such a plan. The court therefore dismissed the conspiracy claim.

Disposition

The court granted Bank of America’s motion to dismiss the plaintiffs’ complaint. It directed the Clerk of Court to enter judgment for the defendants and close the case. The opinion does not state that the dismissal was with or without prejudice.