BANKS AND TERROR: An interesting article (subscription only) in today’s Wall Street Journal:
Three years ago, Tzvi Weiss, an American, was badly injured in Israel by a suicide bomber on a mission from Palestinian terror group Hamas. Now, he and his family are seeking damages from a unit of Royal Bank of Scotland Group PLC, one of the world’s biggest banks, for what he alleges is the bank’s liability for his wounds.
Mr. Weiss’s case, in federal court in Brooklyn, N.Y., raises the prospect that the world’s biggest banks — which have paid heavily for their alleged involvement in frauds at Enron Corp. and WorldCom Inc. (the current MCI Inc.) — could now find themselves under attack by the victims of terrorism for wittingly or unwittingly acting as conduits for terrorist funds. Mr. Weiss and his family are one of many affected by some 10 terrorist attacks in 2002 and 2003 who are bringing the claim.
The complaint alleges that a London-based charity that had accounts at Royal Bank of Scotland’s National Westminster Bank unit acted as a fund-raising arm for Hamas. The complaint, which lists Mr. Weiss and five family members as plaintiffs, was filed in September; NatWest filed for dismissal late last month. According to court documents, an amended complaint is expected to be filed soon.
The London-based charity in question, called Interpal, was named by U.S. authorities as a Specially Designated Global Terrorist after the 2003 bombing that injured Mr. Weiss. . . .
Banking and regulatory lawyers said big banks should prepare for further potential suits as the number of terrorist atrocities increases and victims look for potential culprits from which to claim compensation. “The banks are the target,” said Rodgin Cohen, chairman of New York law firm Sullivan & Cromwell. “That’s where the money is.”
Added Douglas Greenburg, a lawyer in the Washington, D.C., office of Latham & Watkins: “The specter of civil litigation for financing terrorism is something that [banks] should be aware of.”
Get the trial lawyers on their case, and these guys will never know what hit ’em — when Mao used the term “paper tiger” to refer to something that shouldn’t be feared, it was only because he’d never been served with a discovery order. . . .