Zengen v. Comerica Bank (2007) 41 Cal.4th 239, involved four funds transfers, all of which had been ordered by the corporation's (Zengen, Inc.'s) chief financial officer with forged authorizing signatures. (Zengen, supra, 41 Cal.4th at pp. 244-245.)
The corporation sued its receiving bank.
The court concluded that the gravamen of the corporation's action was that the bank "should not have accepted and executed the fraudulent payment orders.
Primarily, it alleges the Bank violated the funds transfer authorization agreement by not obtaining verbal authorization from the person actually authorized to make the payment order.
The California Code squarely covers the question who should bear the loss when a bank executes an unauthorized payment order." (Id. at p. 254.)