Bank of Brewton: Eleventh Circuit affirms Financial Institution Bond’s Distinction between Counterfeit Documents and Fraudulently-Procured, but Authentic, Documents

On February 9, 2015, the Eleventh Circuit Court of Appeals released its decision in Bank of Brewton v. The Travelers Companies, Inc. The Court’s decision reinforces the distinction between counterfeit documents and documents which, although fraudulently-procured and without intrinsic value, are nonetheless authentic. The Facts The Bank of Brewton (the “Bank”) is a private bank located in Alabama. Its customer, Hines, obtained a series of loans for which he pledged various assets as collateral. In 2005, Hines assigned 180 shares of The Securance Group (“TSG”) as collateral for a loan, and delivered to the Bank a share certificate representing these