Zengen, Inc. v. Comerica Bank

Opinion

CHIN, J.

It appears the chief financial officer of a company embezzled $4.6 million by directing four fraudulent funds transfers from the company’s account to an account he controlled. He has disappeared with the money. The ultimate question in this litigation is who must bear the loss: the bank that honored the fraudulent payment orders or the company that employed the embezzler. We granted review to decide two questions arising under California’s Uniform Commercial Code (hereafter, sometimes, California Code).

First, we must decide whether a cause of action under the California Uniform…