The Bank’s Rebuttal
Cathay Bank maintains that, at worst, it was an “unwitting participant” in the scheme. The bank’s motion stresses that California law places no obligation on banks to police the intentions of account holders, investigate potential fraud, or disclose suspicious activities in third-party accounts.
“Because plaintiffs fail to allege that Cathay Bank had any knowledge of the securities fraud, they do not allege that Cathay Bank knowingly assisted the scammers,” the filing stated.
The bank also dismissed claims of securities fraud, noting Zidell had not shown the existence of a true security under law. According to Cathay Bank, Parker told Zidell his profits depended on his own investment efforts — not the work of others, a key legal distinction.
Elder Abuse and Jurisdictional Battle
Zidell also accused the bank of elder abuse. But Cathay Bank countered that the statute does not apply since Zidell is a Texas resident, not a Californian. Further, the bank noted that Zidell’s trusts, also listed as plaintiffs, cannot sue under Texas law without trustee action.
East West Bank, also named in the complaint, allegedly processed 30 wire transfers totaling $16.7 million from Zidell’s accounts to entities tied to the NFT operation.
