A question to any lawyer types out there: does the decision below set a precedent for any victim of terrorism to sue financial institutions whose clients were involved in those acts of terrorism? Would it apply to other types of violence, including state violence?
A Federal Court Judge in Brooklyn on Tuesday approved a lawsuit filed by victims of terror against the Arab Bank for alleged business links with terrorist organizations.
Judge Nina Gershon accepted the feasibility of the joint claim filed by 1,600 people living in Israel, the U.S. and other countries who were hurt in terrorist attacks orchestrated by some of the bank’s clients.
In their lawsuit, complainants claimed the Arab Bank’s Manhattan branch was used to channel funds to Hamas and other Palestinian militants.
I’m not a lawyer, but I’m aware of several cases that have been brought against banks based on their alleged assistance/links/support of terrorism. So this case is not precedential.
A few banks have been found to be run by or as fronts for terror organizations. Those banks have been closed.
Most other cases, however, have tended to have the banks discharged as defendants because merely having bad customers isn’t enough.
The bank would also have to be in violation of standard regulations to monitor money flow, be negligent in its accounting, or have breached some other fiduciary duty. A bank would have to be shown to have known that money was being routed to terrorist organizations or individuals and have done nothing about it. Showing that a bank customer sent money to someone who later passed it on to a terrorist would not be proof that the bank was liable in any way.
Thanks, John.