Hillary Machinery – a Plano, Texas-based provider of manufacturing equipment – was victimized by overseas hackers in November 2009 when more than $800 000 disappeared from one of its corporate accounts maintained by PlainsCapital. The bank was able to recover approximately $600 000, which had made its way to bank accounts in Europe.
After Hillary Machinery requested reimbursement on the remaining amount, PlainsCapital – in what was an unusual tactic – sued the small Texas equipment distributor for not employing proper security measures to safeguard account details. Hillary countered with claims that bank’s fraud alert systems should have been triggered during the unauthorized wire transfers because they were highly anomalous overseas transactions that took place on a Sunday morning.
Back in January, PlainsCapital told Infosecurity that the bank was not at fault for the unauthorized transactions and should not be on the hook for the unrecovered amount. “It is evident that the loss incurred by Hillary Machinery, although regrettable, was not the result of a cyber attack on PlainsCapital”, said Jerry Schaffner, the bank’s president. A PlainsCapital spokesperson also said that the bank uses multi-factor authentication for all its online transactions.
Hillary Machinery, which confirmed that an agreement had been reached, declined to comment on the reported settlement, the terms of which have not been disclosed. The equipment distributor has since pulled its accounts from the bank. A PlainsCapital spokesperson also declined to comment on the matter, only to say that the issue had now been resolved.
Earlier this year at the RSA Conference in San Francisco, Hillary Machinery vice president Troy Owen told Infosecurity that his company was a fairly “lucky” cyber theft victim. He was grateful that Hillary was able to absorb the more than $200 000 in loses, but that other small business owners, many of whom had shared their stories with him about similar incidents, did not cope nearly as well in the aftermath of cyber theft. “We just lost some money”, said Owen, adding that many others he spoke with ending up losing their businesses.