Arizona Laws 47-8404. Wrongful registration
A. Except as otherwise provided in section 47-8406, 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:
Terms Used In Arizona Laws 47-8404
- Indorsement: means a signature that alone or accompanied by other words is made on a security certificate in registered form or on a separate document for the purpose of assigning, transferring or redeeming the security or granting a power to assign, transfer or redeem it. See Arizona Laws 47-8102
- Injunction: An order of the court prohibiting (or compelling) the performance of a specific act to prevent irreparable damage or injury.
- Instruction: means a notification communicated to the issuer of an uncertificated security which directs that the transfer of the security be registered or that the security be redeemed. See Arizona Laws 47-8102
- Jurisdiction: (1) The legal authority of a court to hear and decide a case. Concurrent jurisdiction exists when two courts have simultaneous responsibility for the same case. (2) The geographic area over which the court has authority to decide cases.
- Person: includes a corporation, company, partnership, firm, association or society, as well as a natural person. See Arizona Laws 1-215
- Process: means a citation, writ or summons issued in the course of judicial proceedings. See Arizona Laws 1-215
- Security: except as otherwise provided in section 47-8103, means an obligation of an issuer or a share, participation or other interest in an issuer or in property or an enterprise of an issuer:
(a) Which is represented by a security certificate in bearer or registered form, or the transfer of which may be registered upon books maintained for that purpose by or on behalf of the issuer;
(b) Which is one of a class or series or by its terms is divisible into a class or series of shares, participations, interests or obligations; and
(c) Which:
(i) Is, or is of a type, dealt in or traded on securities exchanges or securities markets; or
(ii) Is a medium for investment and by its terms expressly provides that it is a security governed by this chapter. See Arizona Laws 47-8102
- Uncertificated security: means a security that is not represented by a certificate. See Arizona Laws 47-8102
1. Pursuant to an ineffective indorsement or instruction;
2. After a demand that the issuer not register transfer became effective under section 47-8403, subsection A and the issuer did not comply with section 47-8403, subsection 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. 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 section 47-8210.
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 pursuant to an effective indorsement or instruction.