KRS 355.8-404: Wrongful registration.

(1) Except as otherwise provided in KRS 355.8 -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:

(a) Pursuant to an ineffective indorsement or instruction;

(b) After a demand that the issuer not register transfer became effective under

KRS 355.8-403(1) and the issuer did not comply with KRS 355.8-403(2);

(c) 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

(d) By an issuer acting in collusion with the wrongdoer.

(2) An issuer that is liable for wrongful registration of transfer under subsection (1) of

this section on demand shall provide the person entitled to the security with a like

certificated or uncertificated security, and any payme nts 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

KRS 355.8-210.

(3) Except as otherwise provided in subsection (1) of this section 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.