February 25, 2025

Multi-million Dollar Financial Institution Bond Claim Dismissed, With Prejudice

On February 21, 2025, the U.S. District Court for the Central District of California granted a motion to dismiss filed by Carleton Burch and Jesse Yanco on behalf of Anderson, McPharlin & Conners’ client, Great American Insurance Company for a claim under a Financial Institution Bond. The Court had previously agreed with Great American and co-defendant Berkley Insurance that the claimed $40 million loss was not covered by the Funds Transfer Fraud insuring agreement of the Financial Institution Bond before it. In this renewed motion, the Court held that the Fraudulent Instruction Exclusion excluded coverage under the Computer Fraud prong of the Computer and Funds Transfer Fraud Insuring Agreement, the only insuring agreement still in play. It rejected the insured’s argument that the exclusion rendered the coverage illusory.

Cachet Financial Services, plaintiff v. Berkley Insurance Company, Great American Insurance Company, etc. USDC Central District of California Case No. 2:22-cv-01157-SPG-JEM, Docket No. 65, February 21, 2025.