Does a bank have a duty to protect third parties from fraudulent conduct?

Notably, we have recognized a narrow exception to the rule that banks owe no duty to protect third parties from the fraudulent conduct of bank customers when a bank fails to act to safeguard trust funds on deposit in a fiduciary account after being "confronted with clear evidence indicating that those funds are being mishandled." Id. at 295. Under this exception, a "bank has the right to presume that the fiduciary will apply the funds to their proper purposes under the trust," and the bank loses the right to this presumption when faced with "circumstances which reasonably support the sole inference that a misappropriation is intended." Id. at 287 (internal quotation marks omitted) (quoting Bischoff ex rel. Schneider v. Yorkville Bank, 218 N.Y. 106, 111, 113 (1916)).