Holland & Knight accused of mistakenly sending over $3M to hackers

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Holland & Knight accused of mistakenly sending over $3M to hackers

By Debra Cassens Weiss

December 8, 2023, 10:19 am CST

Holland & Knight is citing an absence of jurisdiction in a movement to dismiss a lawsuit accusing it of mistakenly sending $3.1 million to hackers utilizing a Hong Kong account for a furnishings retailer.

Reuters has the story on the authorized dispute and the allegations towards Holland & Knight, which didn’t reply to the wire service’s request for remark. Spokespeople for the legislation agency additionally failed to instantly reply to an ABA Journal e mail requesting remark.

Holland & Knight was representing an organization being acquired for $130 million when it obtained an e mail that seemed to be from two giant shareholders within the firm, in keeping with allegations within the swimsuit, a third-party grievance. The shareholders have been two nonprofit foundations based by billionaire James Sorenson.

The e-mail directed Holland & Knight to wire $3.1 million that the 2 shareholders have been to obtain for his or her shares to a Hong Kong account as an alternative of to the Zion Financial institution in Utah, in keeping with the grievance allegations cited by Reuters. The Hong Kong account was within the identify of Wemakos Furnishings Co. Ltd.

Holland & Knight exchanged a number of emails “to iron out issues with the underlying documentation,” in keeping with Reuters’ account of the allegations. No cellphone calls have been made, the swimsuit alleges. Then the cash was despatched.

“You’ll be able to most likely predict what occurred subsequent: The cash vanished, by no means to be seen” by the shareholders, Reuters stories.

“It turned out that the Sorenson foundations’ pc programs had been breached. Hackers, who’ve by no means been recognized, used a seemingly reliable Sorenson e mail deal with to trick Holland & Knight into handing over greater than $3 million,” Reuters stories.

The third-party grievance was filed by Quinn Emanuel Urquhart & Sullivan on behalf of Holland & Knight’s former shopper, schooling firm Commencement Alliance, and by the buying firm, KKR subsidiary Tassel Dad or mum.

The grievance was filed in Delaware chancery courtroom, the place an underlying swimsuit filed by the Sorenson foundations towards Commencement Alliance and Tassel Dad or mum is pending due to a discussion board choice clause within the merger settlement.

Holland & Knight argues that it isn’t sure by the discussion board choice clause as a result of it was not a celebration to the merger settlement. And the agency has no places of work in Delaware; the legal professionals engaged on the deal have been based mostly in Virginia and Florida; they usually have been speaking with Utah-based govt, they argue.

Reuters characterised the dispute allegations as “a doozy of a story.”