Our company secretary obtained a signature of the company president under the false pretense that the bank needed to update his signature. She then added her name to the card, but the corporate resolution did not allow her as a signer. She was able to hide her activities of check writing for personal use for a long time, because she did the company books and provided the company accountant fraudulent documents for expenses. Does the bank have any liability for adding her to the company account?
There may be some liability for allowing the addition of a signer without authority from the corporation, but the bank is not responsible for the company's failure to exert reasonable controls over its own personnel and bank accounts. The responsibilities relating to the bank account should have been segregated, so that the secretary could not conduct her fraud undetected for so long. Cases like this are often settled quietly between the bank and its customer, rather than getting into prolonged and expensive court battles.
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There may be some liability for allowing the addition of a signer without authority from the corporation, but the bank is not responsible for the company's failure to exert reasonable controls over its own personnel and bank accounts. The responsibilities relating to the bank account should have been segregated, so that the secretary could not conduct her fraud undetected for so long. Cases like this are often settled quietly between the bank and its customer, rather than getting into prolonged and expensive court battles.
