Arbitrajes Financieros, S.A. v. Bank of Am., N.A., 605 Fed. App’x. 820 (11th Cir. March 26, 2015)
Bond traders specializing in the sale of Venezuelan bonds entered into an agreement with a money transmission company, which opened standard deposit accounts at Bank of America on behalf of the traders. The traders settled a money-laundering investigation with the Department of Justice on terms requiring them to forfeit a portion of the funds held in the bank accounts, because neither the money transmission company nor the traders had the proper licenses or registration to hold U.S. bank accounts. The traders sued Bank of America asserting, among other things, claims of negligence. The traders argued that the bank’s duty of care required it to verify that all licenses and registrations complied with state and federal law.
On appeal, the Eleventh Circuit Court of Appeals affirmed the lower court’s dismissal of the complaint, holding that the bank’s ordinary duty of care did not require it to act for the benefit of the traders. The court rejected the traders’ argument that the bank was a fiduciary with a heightened duty of care. Under Florida law, a bank generally does not have a fiduciary relationship with its standard deposit customers. Nevertheless, a bank may become a fiduciary if it “1) takes on extra services for a customer; 2) receives any greater economic benefit than from a typical transaction, or 3) exercises extensive control.” Capital Bank v. MVB, Inc., 644 So. 2d 515, 519 (Fla. Dist. Ct. App. 1994). The traders claimed that the bank provided “extra services” based on the bank’s provision of specialized technology that allowed them to make wire transfers more quickly than other customers. The court found, however, that the “extra services” provided did not give rise to a fiduciary relationship. The services required to give rise to a fiduciary duty are those that transform a bank’s relationship to exceed the role of a lender by, for example, offering advice or directly orchestrating non-banking transactions. Finding that Bank of America’s specialized technology did not reach that threshold, the court found no fiduciary relationship existed between the bank and the traders.
