In Angelov et.al. v. Wilshire State Bank et.al, the Ninth Circuit agreed with the firm’s contention that a large and successful California bank could be sued for negligence, conversion and other claims arising out of the bank’s association with a “prime bank instrument” scam.
Representing an American non-profit organization and a foreign investor defrauded of millions of dollars by promoters selling investments in fictional prime bank-to-prime bank commercial instruments, the firm attacked the role of the bank in facilitating the fraud. As the complaint alleged, the promoters were customers of the bank, and used the bank and its facilities to provide an aura of legitimacy to the proposed transactions. The Ninth Circuit agreed that those allegations, and the bank’s own misconduct as alleged by plaintiffs was not only sufficient to meet pleadings requirements for negligence and conversion, but could also constitute breach of contract and breach of fiduciary duty.