Cybersecurity: Stolen $1.4 Million Not Covered Under Fraud
Policy
The US District Court for the Eastern District of Pennsylvania
recently determined that a $1.4 million wire
transfer fraud was not covered under Ryeco, LLC, a fruit
distributor s, commercial crime policy.
Ryeco, LLC v.
Selective Ins. Co., No. 2:20-cv-03182 (E.D. Pa. May 13, 2021).
A hacker in South Africa had gained access to Ryeco s network,
fraudulently applied the company s vice president s
signature to wire transfer forms, and emailed these forms to
Ryeco s bank, causing the funds to be transferred into a sham
account.
Ryeco discovered the fraud, performed a forensic investigation,
and obtained a coverage denial from Selective Insurance Company.