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The Vermont Statutes Online



Title

09A

:
Uniform Commercial Code






Chapter

008

:
Investment Securities











 

§

8-404. Wrongful registration

(a) Except as

otherwise provided in Section 8-406, an issuer is liable for wrongful

registration of transfer if the issuer has registered a transfer of a security

to a person not entitled to it, and the transfer was registered:

(1) pursuant to

an ineffective indorsement or instruction;

(2) after a

demand that the issuer not register transfer became effective under Section

8-403(a) and the issuer did not comply with Section 8-403(b);

(3) after the

issuer had been served with an injunction, restraining order, or other legal

process enjoining it from registering the transfer, issued by a court of

competent jurisdiction, and the issuer had a reasonable opportunity to act on

the injunction, restraining order, or other legal process; or

(4) by an issuer

acting in collusion with the wrongdoer.

(b) An issuer

that is liable for wrongful registration of transfer under subsection (a) on

demand shall provide the person entitled to the security with a like

certificated or uncertificated security, and any payments or distributions that

the person did not receive as a result of the wrongful registration. If an

overissue would result, the issuer's liability to provide the person with a

like security is governed by Section 8-210.

(c) Except as

otherwise provided in subsection (a) or in a law relating to the collection of

taxes, an issuer is not liable to an owner or other person suffering loss as a

result of the registration of a transfer of a security if registration was made

pursuant to an effective indorsement or instruction. (Added 1995, No. 92 (Adj.

Sess.), § 1, eff. Jan. 1, 1997.)