                                 CODE OF VIRGINIA

WRONGFUL REGISTRATION (§ 8.8A-404)

a. Except as otherwise provided in § 8.8A-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 endorsement or instruction;

   2. after a demand that the issuer not register transfer became effective under
   &#xA7; 8.8A-403 (a) and the issuer did not comply with &#xA7; 8.8A-403 (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) 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&#8217;s liability to
provide the person with a like security is governed by &#xA7; 8.8A-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 endorsement or instruction.

HISTORY: 1996, c. 216.