Reference no: EM133840818

Question

In this case, JPMorgan followed the exact instructions Stuart Rolfe had set for processing fund transfers, using his email and Outlook calendar for authorization. The bank acted according to the procedures Rolfe had authorized, with no deviation from the agreed-upon process. While JPMorgan does have a general duty to monitor for suspicious activity, there was nothing about these transfers that would have raised immediate concerns given Rolfe's prior instructions. The fraud occurred because the cyberthieves were able to access Rolfe's email and calendar, not because the bank failed in its duties. Rolfe, as the principal, had the responsibility to secure his account and sensitive information, and his failure to do so allowed the fraud to happen. Since the bank followed Rolfe's instructions and the fraud stemmed from Rolfe's own lack of security, JPMorgan is not liable for compensating him for the fraudulent transfers.