8.8A-404 - A-404. Wrongful registration. - Virginia Statutes

§ 8.8A-404. Wrongful registration.

(a) Except as otherwise provided in § 8.8A-406, an issuer is liable forwrongful registration of transfer if the issuer has registered a transfer ofa security to a person not entitled to it, and the transfer was registered:

(1) pursuant to an ineffective endorsement or instruction;

(2) after a demand that the issuer not register transfer became effectiveunder § 8.8A-403 (a) and the issuer did not comply with § 8.8A-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 bya court of competent jurisdiction, and the issuer had a reasonableopportunity to act on the injunction, restraining order, or other legalprocess; or

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

(b) An issuer that is liable for wrongful registration of transfer undersubsection (a) on demand shall provide the person entitled to the securitywith a like certificated or uncertificated security, and any payments ordistributions that the person did not receive as a result of the wrongfulregistration. If an overissue would result, the issuer's liability to providethe person with a like security is governed by § 8.8A-210.

(c) Except as otherwise provided in subsection (a) or in a law relating tothe collection of taxes, an issuer is not liable to an owner or other personsuffering loss as a result of the registration of a transfer of a security ifregistration was made pursuant to an effective endorsement or instruction.

(1996, c. 216.)