NY Federal Court Requires Insurer to Cover Fraudulent Transfer
The United States District Court for the Southern District of New York recently held that an insurance provider, AIG, had to cover settlement costs arising from a third-party email “spoofing” attack that resulted in the fraudulent transfer of nearly $6 million from an investment fund over a period of three weeks. SS&C Technology Holdings, Inc. v. AIG Specialty Insurance Co., No. 19-7859 (S.D.N.Y. Jan. 29, 2020). Unknown third parties used “spoof” email domains to send requests to SS&C, a financial technology provider. The company, believing the requests to be from Tillage, processed wire transfers of funds from Tillage’s accounts to certain bank accounts in Hong Kong. These transfers resulted in the folding of Tillage Commodities Fund and led to litigation and an eventual settlement between Tillage and SS&C.
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Emily A. Bryant-Álvarez, “NY Federal Court Requires Insurer to Cover Fraudulent Transfer,” Month-In-Brief: Internet Law & Cyber-Security, ABA Business Law Today (February 2020).