US court rejects Fed’s motion to dismiss Custodia Bank case

US Court Rejects Federal Reserve’s Motion to Dismiss Custodia Bank Case

A federal court in the US has rejected the Federal Reserve’s motion to dismiss a case against Custodia Bank, which is accused of failing to comply with the Bank Secrecy Act and Anti-Money Laundering regulations.

The US District Court for the Southern District of New York ruled that the Federal Reserve had failed to provide sufficient evidence to support its motion to dismiss the case. The court stated that the Federal Reserve had not adequately addressed the claims made by the plaintiff, Custodia Bank, and that the plaintiff had provided sufficient evidence to support its claims.

The case against Custodia Bank alleges that the bank failed to comply with the Bank Secrecy Act and Anti-Money Laundering regulations. The plaintiff claims that the bank failed to report suspicious activity and failed to implement adequate internal controls to prevent money laundering. The plaintiff also claims that the bank failed to provide adequate customer due diligence.

The Federal Reserve had argued that the case should be dismissed because the plaintiff had failed to provide sufficient evidence to support its claims. However, the court disagreed and ruled that the plaintiff had provided sufficient evidence to support its claims.

The court also noted that the Federal Reserve had failed to address the specific allegations made by the plaintiff. The court stated that the Federal Reserve had not provided sufficient evidence to support its motion to dismiss the case.

This ruling is a significant victory for Custodia Bank, as the court has refused to dismiss the case. The case will now proceed to trial, where the plaintiff will have the opportunity to prove its claims.

Details of the Case

The case was brought by the US Department of Justice in 2018, alleging that Custodia Bank had failed to comply with the Bank Secrecy Act and Anti-Money Laundering regulations. The DOJ alleged that the bank had failed to report suspicious transactions and had failed to properly monitor and investigate suspicious activity.

Court’s Ruling

The court ruled that the Federal Reserve’s motion to dismiss the case was improper, and that the case could proceed. The court found that the Department of Justice (DOJ) had presented sufficient evidence to support its allegations against Custodia Bank.