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84-8-404. Wrongful registration. (a) Except as otherwise provided in K.S.A. 84-8-406, 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 subsection (a) of K.S.A. 84-8-403 and the issuer did not comply with subsection (b) of K.S.A. 84-8-403;

(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) 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 K.S.A. 84-8-210.

(c) 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.

History: L. 1996, ch. 202, § 64; July 1.

KANSAS COMMENT, 1996

This section is a modification of the former 84-8-404 and changes prior law. It is identical to the Official Text.

If the issuer has been notified of a lost, destroyed or stolen security certificate (84-8-406), the issuer is liable for wrongful registration only as provided in the four numbered paragraphs. These include only an ineffective indorsement, failure to give notification or obey an injunction under 84-4-403, or collusion with the wrongdoer.

Revisor's Note:

Former section 84-8-404 was repealed by L. 1996, ch. 202, § 91 and the number reassigned to the current text.


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