Citibank can't get back $500 million it wired by mistake, judge ruled.
Interesting article. Comments welcome. I surmise this case will be reversed.Quote:
An exception to the rule
The law usually punishes those who spend money accidentally deposited in their accounts. Accidental transfers are common in the digital age, and wires can be paid back instantly. A Pennsylvania couple faced felony charges after spending money accidentally deposited in their account.
But New York law has exceptions to this rule, known as the "discharge-for-value-defense."
If the beneficiary is entitled to the money and did not know it was accidentally wired, they can keep it. Revlon lenders said they believed Citibank was wiring prepayments for a loan. After all, the money accidentally wired was the exact amount "to the penny" Citibank owed them, although the loan wasn't set to mature for quite some time.
