Arab Bank settles terror financing suit
Arab Bank has agreed to settle a class action litigation by 297 victims of terrorism, days before an unprecedented damages trial was due to begin.
The agreement comes a year after the Linde v Arab Bank decision by a New York jury that the bank was in breach of the Financial Anti-Terrorism Act 2001. The court found Arab Bank liable for 22 Hamas terrorist attacks that took place in Israel in the early 2000s. At the time, the bank had allowed the transfer of US$60,000 to Hamas leader Sheikh Ahmed Yassin and payments to the families of suicide bombers. The plaintiffs were represented by Motley Rice attorney Michael Elsner. The settlement details remain confidential, with Elsner’s office declining to give the figure when contacted.
A concern for bank GCs
The case was to be the first civil trial against a financial institution under the 2001 legislation and the settlement will concern GCs at banks actively lending in the Middle East. Several banking industry lawyers told the New York Times that the case could accelerate a withdrawal of banks from conflict stricken countries. Sources also indicated that banks could now be liable for crimes committed by clients, even if compliance rules were followed. Sources: The New York Times; The Jewish Press