BB heist: RCBC hires US law firm to defend lawsuit

The Rizal Commercial Banking Corporation (RCBC) has hired top US law firm Quinn Emanuel to defend the lawsuit filed by Bangladesh Bank with a New York court over the cyber heist of its reserves in which $81 million was stolen nearly three years ago.

The Philippine bank revealed this in a stock exchange filing today.

“We will show that this suit is nothing more than a political stunt by the Bangladesh Bank to try to shift blame from themselves to RCBC,” Tai-Heng Cheng, Quinn Emanuel’s lead attorney to the case, was quoted as saying in the filing.

“This is nothing more than a thinly veiled PR (public relations) campaign disguised as a lawsuit. Based on what we have heard this suit is completely baseless. If the Bank of Bangladesh was serious about recovering the money, they would have pursued their claims three years ago and not wait until days before the statute of limitations.”

“Not only are the allegations false, they don’t have the right to file here since none of the defendants are in the US,” Cheng said, reports the Philippine Daily Inquirer.

“A review of the facts shows that Bangladesh Bank’s errors, omissions, and lapses in security protocols are the cause of its loss.  We believe it is telling that they have concealed information from their own investigation and despite admitting their own culpability, continue to try to blame others,” the legal counsel for RCBC also said.

“RCBC had nothing to do with the theft of the funds and has cooperated fully with every investigation into the matter. This suit is nothing more than a blatant attempt by Bangladesh Bank to shift blame and cover up their own liability,” he added.

Bangladesh Bank today filed a case with the United States District Court for the Southern District of New York around 7:00am (NY time 8:00pm) against Philippines' Rizal Commercial Banking Corporation (RCBC) to recover the full amount stolen in the February, 2016 heist.

A US law firm filed the case on behalf of Bangladesh through online with the court in Manhattan of New York City and the court accepted the lawsuit immediately. 

Earlier on Wednesday, RCBC said the cyberheist was an inside job and Bangladesh Bank was engaging in a cover-up by maligning it.

“We welcome this complaint, as it is an opportunity for RCBC to put on record again that it was a victim of what was started in Bangladesh by still unnamed persons,” the bank said in a statement on Wednesday.

It further said that it was also a victim of the elaborate heist, insisting that the entry of the funds into the Philippines through the bank was the work of a rogue branch manager working alone, reports the Philippine Daily Inquirer.

A lack of transparency on the part of the Bangladesh government over the supposed internal security lapses allowed the heist to take place, RCBC also said.

The Philippine bank alleged that the Bangladesh central bank had been trying to evade responsibility for its own failures.

“We hope Bangladesh Bank can be as transparent and stop blaming everybody but itself,” it said in the statement.

“The complaint will allow us to finally get the information we, and the Philippine government, have been asking Bangladesh Bank to provide.”

How was the cyber heist carried out? 

On February 4, 2016, hackers broke into the Bangladesh central bank's system and generated 70 fake payment orders to the Federal Reserve Bank of New York amounting to $1.94 billion.

The NY Fed's security system flagged the payment orders but only five of them fell through and $101 million was released.

Of the amount, $81 million was wired to RCBC's branch in Manila, while $20 million made its way to Sri Lanka.

Sri Lanka sent back the entire sum immediately after the heist was exposed while the Philippines sent back $14.54 million in November 2016 -- meaning $66.46 million is yet to be retrieved from there.