JPMorgan ordered to face lawsuit over cyber attack on Ray-Ban maker

JPMorgan will face a lawsuit over whether it ignored the warning signs of a cyber attack on manufacturer Essilor, which saw $272m taken by criminals.

Essilor, which manufactures Ray-Ban sunglasses, sued JPMorgan in April, alleging that the bank failed to notify it of suspicious activity in its New York bank account.

The French manufacturer can now try to prove that a law in New York in relation to commercial contracts was violated.

In papers filed at a federal court in Manhattan in April, the manufacturer said there was a huge increase in the volume of money transacted, as well as money being sent to shell companies in countries seen as high risk.

“The fraudulent transfers were all made in round dollar amounts (i.e., no cents), which was a dramatic departure from prior periods where round dollar transfers were relatively infrequent,” Essilor said at the time.

The judge rejected a claim by JPMorgan that Essilor had authorised the transfers because the bank had received two approvals for each, therefore following the required security procedures. A breach of contract claim was rejected, but the judge said Essilor can try to revive it.

Banks are also under the spotlight as a result of failures to spot suspicious activity on their networks. For example, banks have received huge fines from regulators for failing to identify and prevent money laundering by criminals.

According to research published last year by business-to-business information services company Kyckr, 28 financial institutions across the globe were fined for AML-related violations in 2020, equating to roughly £2.6bn.

The UK has the second-highest amount of money laundered globally, with an estimated £88bn cleaned by criminals each year.

JP Morgan is one of the world’s biggest banks, with a huge IT budget. Speaking at a recent event, Ziv Gafni, who is head of digital strategy, fintech and markets innovation at JP Morgan, said the bank invests around $12bn a year in technology.

A large proportion of any IT spend in banks goes on security, but criminals still find their way around defences.

Read more on Hackers and cybercrime prevention

• 
  

  Finance regulator cracks down on use of messaging apps

  

  By: Karl Flinders

• 
  

  JPMorgan’s UK digital bank app outage locks customers out

  

  By: Karl Flinders

• 
  

  JP Morgan acquires fintech for payments modernisation

  

  By: Karl Flinders

• 
  

  JPMorgan’s UK digital retail bank reaches half-million customer mark

  

  By: Karl Flinders