SDNY COURTHOUSE, Oct 29 – Bronx-based meat
distributor Nebaskaland was defrauded by people
impersonating their bank, HSBC. But then HSBC did not
notify then, even after HSBC flagged one of many
transactions for $19,999 as suspicious.
Then, Nebraskaland alleges, HSBC said they
would only look into it if Nebraskaland signed a release
of any liability by HSBC. Nebaskaland ultimately
sued. On October 29 oral argument was held
before U.S. District Court for the Southern District of
New York Judge Arun Subramanian. Inner City Press was
there and live tweeted, here
Judge Subramanian: How didn't they
get an email about changes proposed to their account? This
happens to me on Netflix, anything I try to change.
HSBC's lawyer: Both of them were on the
phone with the fraudsters and give the information Judge:
That's your 2FA? Yes HSBC's lawyer: They authorized
these transactions. Judge: They were defrauded. What's
your legal argument on agency? HSBC's lawyer: There isn't
a case that is directly parallel. But there's one on
apparent authority.
Judge: Are you saying they're too
dumb? Judge: Too dumb to know they were being
defrauded? Are you saying you could not find a case?
HSBC's lawyer: We could not. But there is a gap in the
pleading, it does not meet notice pleading requirements
Judge: What do you not have notice of? HSBC: The call
Judge: Plaintiff, is it your position that whatever
information was provided was under false pretenses?
Plaintiff's lawyer: Yes. Millions of dollars were
lost. Judge: UCC 4a-202a: Good faith, HSBC has to prove
it.
HSBC's lawyer: There is the pleading
failure. Plaintiff's lawyer: They flagged one transaction,
but not the others. There was payroll paid to new people,
from new accounts. Judge Subramanian: How does this
happen? If my card gets flagged at Raising Cain's, I can't
use it until the all-clear is given
Plaintiff's lawyer: If there is dismissal,
let it be without prejudice and we'll add more. I have
with me Richard, the founder HSBC's (outside) counsel: Ms.
Walsh, in house at HSBC, is here.
Judge: The case is going to proceed
More on X for Subscribers here
and Substack here
The case is Nebraskaland, Inc. v. HSBC Bnak
USA, N.A., 1:26-cv-5622 (Subramanian)
