JP Morgan, Research Paper Example

The tort action of “interference with Contractual Relations allows for a plaintiff to be able to recover damages that are based on the claim that a defendant interfered with the plaintiff’s contractual relations. The factors of an intentional interference with the contractual relations claims are that first, the valid contract made between the plaintiff and a third party, and secondly the defendant’s knowledge of the contract. Third, the defendant’s intentional acts designed to produce a breach or disruption of the contractual relationship, fourth, the actual breach or disruption of the contractual relationship, and lastly the damage resulted.

In order to be considered a tortious action, the actions of the defendant must be substantially exceeding fair competition and the free expression. Within the court the plaintiff must prove, “1) his reasonable expectation of entering into a valid business relationship; (2) the defendant’s knowledge of the plaintiff’s expectancy; (3) purposeful interference by the defendant that prevents the plaintiff’s legitimate expectancy from ripening into a valid business relationship; and (4) damages to the plaintiff resulting from such interference.” (Myers & Conner LLC, 2011) Such that a persuading bank will not lend a competitor any additional money. The “fiduciary duty” is the duty or legal obligation, which is recognized and imposed by the law on one who is acting as a fiduciary. When a party fails to fulfill their legal obligations, they have breached their duty to that party. Additionally, when a party is entrusted to act for the benefit of another party fails to act properly, the first party have breached their fiduciary duty.

Regarding the case of JP Morgan, the court concluded in 2012 that JP Morgan had breached its fiduciary duty in 2000 when they sold what are referred to as variable prepaid forward contracts to the trusts, which are complex fee-rich products that the judged determined was unsuitable for the trust. If another bank were to act in such a way as JP Morgan they would not prevail in the tortious actions, because they would have breached their duty to their clients in being negligent and failing to act properly in their fiduciary duty. The ability to disprove the five factors outlined is the difference between a guilty or an innocence verdict for my bank.

Companies are trending towards mobile banking for the easy access of their customers now using their smart phones to conduct transactions, and looking for ways to easily look up their information. Online banking through the mobile phone allows for consumers to utilize the same features that are readily available on the computer. As millions of users move toward accessing their bank information on their smartphones, there are is more need for security protocols to secure customer and banking information. Hackers and other schemers are inventing more ways to break into firewalls and create spoofing websites in order to trick consumers to providing their information for the criminals. In the recent events to security breaches of mega-banks Bank of America and Chase, more scrutiny and responsibility is placed to protect their software so customers can make mobile online transactions. In a study conducted by the Federal Reserve, “respondents were asked to rate the security of mobile banking for protecting their personal information and 32% rated it as somewhat unsafe and very unsafe, while 34% were not sure of the security.”(Pegueros, 2012)

The common technology used is the automation systems that allows for Banks to set up a mobile channel that is accessible by the customers through the mobile application on their phones which are then accessed with their pin or password. Banks are starting to secure and protect their software through the use of impenetrable firewalls set up by proxy settings including the secure HTTPS settings on their applications. Also in the event that they use third party software, they have set up security protocols that check for malware and other virus that can disrupt the application. The banks have set up fraud management systems that helps with fraud prevention and detection services, including 24 hour customer service for customers. Also most banks have dual security methods implemented for customers to check for authentication when customers access their applications. These methods include password protection, checking for authentication through text messages or emails sent to the customers to clarify identity.

References

“Tortious Interference with Contract and Prospective Economic Advantage.” (2011). Myers and Conner LLC. Retrieved from http://www.meyeroconnor.com/quarterly_updates/2011q1_mo_quarterly_update.pdf

Pegueros, Vanessa. “Security of Mobile Banking and Payments.” (2012). Sans Institute. Retrieved from http://www.sans.org/reading_room/whitepapers/ecommerce/security-mobile-banking-payments_34062