Regatos v. North Fork Bank
Court of Appeals of New York
838 N.E.2d 629 (2005)
Tomas Regatos (plaintiff) held a commercial account with the bank that became North Fork Bank (defendant); their account agreement required Regatos to flag any irregularity within 15 days of a statement being mailed or made available, though the bank actually held statements until Regatos requested them. The bank processed two fraudulent wire-transfer orders totaling $600,000 without following its own security procedures to confirm them. Regatos discovered the unauthorized transfers only when he checked his statements months later, and he notified the bank the same day, but the bank refused reimbursement. A jury awarded Regatos $600,000 plus interest, and on the bank's appeal the Second Circuit certified questions of New York law to the Court of Appeals.
Whether a bank must refund an unauthorized transfer when the customer notifies the bank within UCC § 4A-505's one-year statute of repose (running from actual notice of the transfers), even where the bank claims the notice period and requirement were altered by agreement.