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Cyber Risks · Krebs on Security

Court Ruling Could Be Boon to Cyberheist Victims

Summary: The U.S. Court of Appeals for the First Circuit reversed an August 2011 ruling and held that Ocean Bank's security systems were "commercially unreasonable" in a 2009 cyberheist in which the ZeuS trojan was used to steal $588,000 from Patco Construction Co. through fraudulent ACH transfers over seven days, of which the bank blocked or clawed back $243,406, leaving Patco with a net loss of $345,445. The appeals court sent specific aspects of the earlier decision back to the lower court and encouraged both parties to settle out of court.

What's compelling: The court found the bank's system unreasonable because it lowered its challenge-question threshold to $1, then failed to monitor or notify the customer when it had warning fraud was likely occurring in a transaction - a collective failure, not a single one, that a security leader can measure their own controls against.

Read the original at Krebs on Security ↗

Topics
Data Breaches
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