Texas Business & Commerce Code

§ 8.404 — WRONGFUL REGISTRATION

BC § 8.404Title 1. UNIFORM COMMERCIAL CODE · Ch. 8. INVESTMENT SECURITIES · Art. D. REGISTRATION

Statute text

(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 appropriate injunction, restraining order, or other process from a court of competent jurisdiction enjoining it from registering the transfer, 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.

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Legislative history

Amended by Acts 1995, 74th Leg., ch. 962, Sec. 1, eff. Sept. 1, 1995.