84-8-115. A securities intermediary that has transferred a financial asset pursuant to an effective entitlement order, or a broker or other agent or bailee that has dealt with a financial asset at the direction of its customer or principal, is not liable to a person having an adverse claim to the financial asset, unless the securities intermediary, or broker or other agent or bailee:
(a) Took the action after it had been served with an injunction, restraining order or other legal process enjoining it from doing so, issued by a court of competent jurisdiction, and had a reasonable opportunity to act on the injunction, restraining order or other legal process; or
(b) acted in collusion with the wrongdoer in violating the rights of the adverse claimant; or
(c) in the case of a security certificate that has been stolen, acted with notice of the adverse claim.
History: L. 1996, ch. 202, ยง 42; July 1.
KANSAS COMMENT, 1996
This section is derived from the former 84-8-318 and is identical to the Official Text except that Kansas has designated subsections with lower case letters rather than arabic numbers. The section generally insulates a good faith securities intermediary or broker, hereafter "agent," from liability for dealing with a financial asset where a third party has an adverse claim to it. Pursuant to subsection (a), an adverse claim is enforceable only if the transfer is in violation of an order served on the agent. Notice of an order is not sufficient. If the agent is in collusion with the wrongdoer, the agent can be held liable. Under subsection (c), however, where the adverse claim is based on the contention that the assets were stolen, an agent will be liable for dealing with the financial assets after notice of the claim. Depending on the adverse claim, therefore, subsection (c) places a great deal more duty on the agent than subsections (a) and (b).
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