Section 5-421 - Immunity - Fiduciary security transfers. - Maryland Statutes

§ 5-421. Immunity - Fiduciary security transfers.
 

(a)  Definitions.-  

(1) In this section the following words have the meanings indicated. 

(2) "Assignment" has the meaning stated in Title 15, Subtitle 3 of the Estates and Trusts Article. 

(3) "Corporation" has the meaning stated in Title 15, Subtitle 3 of the Estates and Trusts Article. 

(4) "Fiduciary" has the meaning stated in Title 15, Subtitle 3 of the Estates and Trusts Article. 

(5) "Person" has the meaning stated in Title 15, Subtitle 3 of the Estates and Trusts Article. 

(6) "Transfer" has the meaning stated in Title 15, Subtitle 3 of the Estates and Trusts Article. 

(7) "Transfer agent" has the meaning stated in Title 15, Subtitle 3 of the Estates and Trusts Article. 

(b)  Nonliability in absence of actual knowledge.- A person who participates in the acquisition, disposition, assignment, or transfer of a security by or to a fiduciary, including a person who guarantees the signature of the fiduciary, is not liable for participation in any breach of fiduciary duty by reason of failure to inquire whether the transaction involves a breach unless it is shown that the person acted with actual knowledge that the proceeds of the transaction were being or were to be used wrongfully for the individual benefit of the fiduciary or that the transaction was otherwise in breach of duty. 

(c)  Person guaranteeing signature of fiduciary.- If a corporation or transfer agent makes a transfer under an assignment by a fiduciary, a person who guaranteed the signature of the fiduciary is not liable on the guarantee to any person to whom the corporation or transfer agent, by reason of this section or Title 15, Subtitle 3 of the Estates and Trusts Article, incurs no liability. 
 

[1990, ch. 546, § 3; 1997, ch. 14, § 9.]