Law Firms
Holland & Knight accused of mistakenly sending over $3M to hackers
Holland & Knight is citing a lack of jurisdiction in a motion to dismiss a lawsuit accusing it of mistakenly sending $3.1 million to hackers using a Hong Kong account for a furniture store. Image from Shutterstock.
Holland & Knight is citing a lack of jurisdiction in a motion to dismiss a lawsuit accusing it of mistakenly sending $3.1 million to hackers using a Hong Kong account for a furniture store.
Reuters has the story on the legal dispute and the allegations against Holland & Knight, which did not respond to the wire service’s request for comment. Spokespeople for the law firm also failed to immediately reply to an ABA Journal email requesting comment.
Holland & Knight was representing a company being acquired for $130 million when it received an email that appeared to be from two large shareholders in the company, according to allegations in the suit, a third-party complaint. The shareholders were two nonprofit foundations founded by billionaire James Sorenson.
The email directed Holland & Knight to wire $3.1 million that the two shareholders were to receive for their shares to a Hong Kong account instead of to the Zion Bank in Utah, according to the complaint allegations cited by Reuters. The Hong Kong account was in the name of Wemakos Furniture Co. Ltd.
Holland & Knight exchanged several emails “to iron out problems with the underlying documentation,” according to Reuters’ account of the allegations. No phone calls were made, the suit alleges. Then the money was sent.
“You can probably predict what happened next: The money vanished, never to be seen” by the shareholders, Reuters reports.
“It turned out that the Sorenson foundations’ computer systems had been breached. Hackers, who have never been identified, used a seemingly legitimate Sorenson email address to trick Holland & Knight into handing over more than $3 million,” Reuters reports.
The third-party complaint was filed by Quinn Emanuel Urquhart & Sullivan on behalf of Holland & Knight’s former client, education company Graduation Alliance, and by the acquiring company, KKR subsidiary Tassel Parent.
The complaint was filed in Delaware chancery court, where an underlying suit filed by the Sorenson foundations against Graduation Alliance and Tassel Parent is pending because of a forum selection clause in the merger agreement.
Holland & Knight argues that it isn’t bound by the forum selection clause because it was not a party to the merger agreement. And the firm has no offices in Delaware; the lawyers working on the deal were based in Virginia and Florida; and they were communicating with Utah-based executive, they argue.
Reuters characterized the dispute allegations as “a doozy of a tale.”