§ 6A-8-404 - Wrongful registration. - Rhode Island Statutes

SECTION 6A-8-404

   § 6A-8-404  Wrongful registration. –(a) Except as otherwise provided in § 6A-8-406, an issuer is liable forwrongful registration of transfer if the issuer has registered a transfer of asecurity 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 transferbecame effective under § 6A-8-403(a) and the issuer did not comply with§ 6A-8-403(b);

   (3) after the issuer had been served with an injunction,restraining order, or other legal process enjoining it from registering thetransfer, issued by a court of competent jurisdiction, and the issuer had areasonable opportunity to act on the injunction, restraining order, or otherlegal process; or

   (4) by an issuer acting in collusion with the wrongdoer.

   (b) An issuer that is liable for wrongful registration oftransfer under subsection (a) on demand shall provide the person entitled tothe security with a like certificated or uncertificated security, and anypayments or distributions that the person did not receive as a result of thewrongful registration. If an overissue would result, the issuer's liability toprovide the person with a like security is governed by § 6A-8-210.

   (c) Except as otherwise provided in subsection (a) or in alaw relating to the collection of taxes, an issuer is not liable to an owner orother person suffering loss as a result of the registration of a transfer of asecurity if registration was made pursuant to an effective indorsement orinstruction.