(a) Except as otherwise provided in § 8-406 of this subtitle, 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) In accordance with an ineffective indorsement or instruction;
- (2) After a demand that the issuer not register transfer became effective under § 8-403(a) of this subtitle and the issuer did not comply with § 8-403(b) of this subtitle;
- (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) An issuer that is liable for wrongful registration of transfer under subsection (a) of this section 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 § 8-210 of this title.
- (c) Except as otherwise provided in subsection (a) of this section 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 in accordance with an effective indorsement or instruction.
Added by Acts 1996, c. 92, § 2, eff. Oct. 1, 1996.