Bank’s Negligence Leads to Tort Claim

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A recent decision by the Swiss Supreme Court has highlighted the importance of examining the intentional conduct of specific bank employees in cases of alleged money laundering and fraud. The court emphasized that only employees with supervisory positions and decision-making authority, as listed in Article 29 of the Swiss Civil Code (SCC), are considered responsible for the bank’s actions.

Background

A major bank was found to have been involved in fraudulent activities, including unauthorized payments and trading. The fraud was committed by a relationship manager who falsified bank statements and contracts. The bank’s internal investigation revealed that the employee had been engaging in these activities for an extended period, causing significant financial losses to clients.

Clients’ Claim

The affected clients are now seeking damages from the bank, claiming that it failed to prevent or detect the fraud. In response, the bank is arguing that it was the victim of its own employee and that the clients’ lack of diligence allowed the fraud to continue. However, the Supreme Court’s decision suggests that the bank may be held liable for its employees’ actions.

Challenges Facing Clients

In cases where banks discover internal fraud, they often initiate an investigation to assess the scope of the fraud and identify those involved. However, clients may face difficulties in obtaining a detailed explanation of the fraudulent activities that occurred in their accounts. In some instances, banks may indemnify their clients without providing any information, while in most cases, they argue that they are the victims of their own employees.

What Clients Must Do

In such situations, clients must act swiftly to challenge the transactions and operations on their accounts. The general terms and conditions typically stipulate a short time period for doing so. If the fraud was perpetrated over an extended period, it may also be urgent to interrupt the statute of limitation.

Gathering Information is Crucial

The success of these cases depends heavily on gathering accurate information about the fraudulent activities. This includes analyzing bank statements, contracts, and other documents to identify the scope of the fraud.

Collaboration with Lawyers from Other Jurisdictions

Large-scale fraud cases often involve multiple jurisdictions, making it essential for lawyers from each jurisdiction to collaborate and establish a global strategy. By working together, they can maximize the chances of recovering losses by analyzing the advantages of each jurisdiction for the claimant and moving the bank out of its comfort zone.

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