West Virginia Code 31-4D-7 – Nonliability of third persons
(a) No person who participates in the acquisition, disposition, assignment or transfer of a security by or to a fiduciary including a person who guarantees the signature of the fiduciary is liable for participation in any breach of fiduciary duty by reason of failure to inquire whether the transaction involves such a breach unless it is shown that he acted with actual knowledge that the proceeds of the transaction were being or were to be used wrongfully for the individual benefit of the fiduciary or that the transaction was otherwise in breach of duty.
Terms Used In West Virginia Code 31-4D-7
- Assignment: includes any written stock power, bond power, bill of sale, deed, declaration of trust or other instrument of transfer. See West Virginia Code 31-4D-1
- Corporation: A legal entity owned by the holders of shares of stock that have been issued, and that can own, receive, and transfer property, and carry on business in its own name.
- Corporation: means a private or public corporation, association or trust issuing a security. See West Virginia Code 31-4D-1
- Fiduciary: A trustee, executor, or administrator.
- Fiduciary: means an executor, administrator, trustee, guardian, committee, conservator, curator, tutor, custodian or nominee. See West Virginia Code 31-4D-1
- Person: includes an individual, a corporation, government or governmental subdivision or agency, business trust, estate, trust, partnership or association, two or more persons having a joint or common interest, or any other legal or commercial entity. See West Virginia Code 31-4D-1
- Security: includes any share of stock, bond, debenture, note or other security issued by a corporation which is registered as to ownership on the books of the corporation. See West Virginia Code 31-4D-1
- Transfer: means a change on the books of a corporation in the registered ownership of a security. See West Virginia Code 31-4D-1
- Transfer agent: means a person employed or authorized by a corporation to transfer securities issued by the corporation. See West Virginia Code 31-4D-1
(b) If a corporation or transfer agent makes a transfer pursuant to an assignment by a fiduciary, a person who guaranteed the signature of the fiduciary is not liable on the guarantee to any person to whom the corporation or transfer agent by reason of this article incurs no liability.
(c) This section does not impose any liability upon the corporation or its transfer agent.