§ 8404. Wrongful registration.

(a) General rule.--Except as otherwise provided in section 8406 (relating to obligation to notify issuer of lost, destroyed or wrongfully taken security certificate), 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 8403(a) (relating to demand that issuer not register transfer) and the issuer did not comply with section 8403(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) Obligations of issuer.--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 8210 (relating to overissue).

(c) Registration pursuant to effective indorsement or instruction.--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.

Cross References. Section 8404 is referred to in section 8406 of this title.