(2) The person is aware of facts sufficient to indicate that there is a significant
probability that the adverse claim exists and deliberately avoids information that
would establish the existence of the adverse claim; or
(3) The person has a duty, imposed by statute or regulation, to investigate whether
an adverse claim exists, and the investigation so required would establish the existence
of the adverse claim.
(b) Having knowledge that a financial asset or interest therein is or has been transferred
by a representative imposes no duty of inquiry into the rightfulness of a transaction
and is not notice of an adverse claim. However, a person who knows that a representative has transferred a financial asset
or interest therein in a transaction that is, or whose proceeds are being used, for
the individual benefit of the representative or otherwise in breach of duty has notice
of an adverse claim.
(c) An act or event that creates a right to immediate performance of the principal
obligation represented by a security certificate or sets a date on or after which
the certificate is to be presented or surrendered for redemption or exchange does
not itself constitute notice of an adverse claim except in the case of a transfer
(1) One year after a date set for presentment or surrender for redemption or exchange;
(2) Six months after a date set for payment of money against presentation or surrender
of the certificate, if money was available for payment on that date.
(d) A purchaser of a certificated security has notice of an adverse claim if the security
(1) Whether in bearer or registered form, has been indorsed “for collection” or “for
surrender” or for some other purpose not involving transfer; or
(2) Is in bearer form and has on it an unambiguous statement that it is the property
of a person other than the transferor, but the mere writing of a name on the certificate
is not such a statement.
(e) Filing of a financing statement under article 9 is not notice of an adverse claim
to a financial asset.
FindLaw Codes may not reflect the most recent version of the law in your jurisdiction. Please verify the status of the code you are researching with the state legislature or via Westlaw before relying on it for your legal needs.
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