Alpha Morgan Sues 19 Banks Over N230.9m loss

A new generation bank, Alpha Morgan Bank Limited, has dragged 19 banks in Nigeria before the Federal High Court in Lagos in its quest to recover the sum of N230.9 million that was fraudulently withdrawn from the accounts of two of its customers due to a system glitch.

Alpha Morgan Bank claimed in the suit that the funds belonging to NEM Insurance Plc and Extension Publications Limited were stolen from its vault and allegedly fraudulently transferred into multiple accounts across 19 financial institutions.

The bank is requesting an order from the court, directing the 19 financial institutions to reverse and remit to Alpha Morgan Bank all funds illegally debited from the customers’ settlement and collection accounts and transferred into the accounts of the defendants’ customers.

The suit was filed by Alpha Morgan Bank, alongside the affected customers.

In an affidavit filed in support of the suit and deposed to by a litigation officer, Dayo Abe, the plaintiffs averred that several digital financial services agents had taken advantage of a system glitch in the bank’s operations.

Abe alleged that the agents, acting as service providers and holding accounts with some of the defendant financial institutions, used the glitch to unlawfully make several transfers from the accounts of NEM Insurance Plc and Extension Publications Limited.

He also claimed that N230,978,536 was illegally transferred from the customers’ accounts, which were domiciled with Alpha Morgan Bank, into various accounts belonging to individuals across 19 financial institutions.

The Plaintiffs further stated that following the bank’s complaint, the affected financial institutions placed temporary “no-debit” restrictions on the implicated accounts.

Abe alleged that the perpetrators continued to transfer the illicit funds into other accounts linked to their Bank Verification Numbers (BVNs), raising concerns that the funds could be completely dissipated unless all accounts connected to the suspected fraudsters were immediately frozen.

He argued that failing to block all accounts associated with the perpetrators would result in continued illegal withdrawals, thereby exposing investors’ and shareholders’ funds to risk further.

The Plaintiffs also submitted that the system glitch and the resulting fraud have caused severe financial hardship and that urgent court intervention is necessary to prevent additional losses.