A federal appeals court Thursday reversed a lower court and ruled a Hartford Financial Services Insurance Group Inc. unit must indemnify a financial services company that was victimized by a scammer.
In January 2015, Austin-based HM International LLC’s chief financial officer received an email from a fraudster purporting to be client Greg Geib instructing the company to wire transfer $1 million to another bank account, according to the ruling by the 5th U.S. Circuit Court of Appeals in New Orleans in HM International, LLC v. Twin City Fire Insurance Co.
HMI executed the order, which caused Mr. Geib and his wife to lose the $1 million, much of which they have been unable to recover, according to the ruling. The fraud was discovered two days later when the scammer tried the scheme a second time without success.
Three months later, the Geibs’ attorney sent HMI a letter accusing it of negligence and demanding compensation…